WASHINGTON—The U.S., Mexico and Canada formally have signed the U.S.-Mexico-Canada Free Trade Agreement, which now has the support of congressional Democrats and labor unions after changes were made on workers' rights, environmental protections and other issues.
Organizations as diverse as the United Steelworkers union, the Motor & Equipment Manufacturers Association, the Auto Care Association, the National Retail Federation and the National Association of Manufacturers expressed approval of USMCA, the successor to the North American Free Trade Agreement, which became effective in 1994.
U.S. Trade Representative Robert E. Lighthizer, Mexican Deputy Foreign Minister Jesus Seade and Canadian Deputy Prime Minister Chrystia Freeland signed the 2,000-plus-page document Dec. 10 in Mexico City.
In a statement after the signing, Lighthizer praised President Trump for his leadership in bringing the USMCA to fruition.
"After working with Republicans, Democrats and many other stakeholders for the past two years, we have created a deal that will benefit American workers, farmers and ranchers for years to come," Lighthizer said. "This will be the model for American trade deals going forward."
Replacing NAFTA with the USMCA was a key campaign pledge for Trump, who has often called NAFTA the worst trade deal in history.
The U.S. House of Representatives is expected to vote the week of Dec. 16 to approve the USMCA, but Senate Majority Leader Mitch McConnell has indicated the Senate will not vote on the trade agreement until the impeachment trial of President Trump next year. House Democrats approved two articles of impeachment against Trump Dec. 19, and the House is expected to approve those articles on a strict party-line vote.
Among other provisions, the USMCA would require auto makers in all three countries to obtain 75 percent of their automotive content from within North America to qualify for duty-free benefits in transporting vehicles and parts across borders. This is up from NAFTA's 62.5 percent.
Also, at least 40 percent of vehicles would have to originate in places where hourly wages are at least $16.
The pact would require Mexico to allow workers to form independent unions. Traditionally and under NAFTA, Mexican unions were mostly employer-controlled, a prime reason for Mexican wages being much lower than those in the U.S. or Canada. The labor provisions of the USMCA are expected to create an estimated 175,000 U.S. jobs.
USW International President Thomas Conway endorsed the revised USMCA in a statement after the deal was announced.
NAFTA, Conway said, "cost countless jobs, ravaged families and communities and pulled down wages as companies have outsourced jobs and production to Mexico.
"The updated draft agreement now has enforcement provisions that can help make a difference," Conway said. "There is still a great deal of work to do in terms of implementing, monitoring and enforcing the provisions, but the base for progress is there."
MEMA, which came out early in its support for the USMCA, congratulated Lighthizer, House Speaker Nancy Pelosi and others in reaching the deal.
"While we still need to learn more about the details of the plan, we like what we hear so far," MEMA said. "Absent any concerns with the actual language, MEMA calls for a quick consideration of the USMCA and a positive vote in 2019. It can be done."
ACA president Bill Hanvey also reiterated his organization's strong support for the agreement.
"The trilateral agreement will strengthen trade and maintain tariff-free market access to two of our most important trading partners, accounting for more than 70 percent of total U.S. auto parts exports," Hanvey said.
The NAM expressed qualified support for the revised USMCA.
"We are extremely disappointed that this agreement missed an opportunity to set the gold standard for the protection of American-made lifesaving innovations and inventions," said NAM President Jay Timmons.
"Nevertheless, a ratified USMCA will deliver increased certainty to manufacturers—especially for the 2 million manufacturing workers whose jobs depend on North American trade," Timmons said.
Matthew Shay, president of the NRF, said the agreement takes many important steps to modernize the now-antiquated provisions of NAFTA.
"The agreement could not come at a better time and provides certainty for U.S. retailers that rely on the North American market," Shay said. "It also ensures American families can continue to have access to a wide range of high-quality products at prices they can afford."