The U.S.-Mexico-Canada trade deal brings NAFTA into the 21st century | Opinion
American, Mexican and Canadian lawmakers will soon have an opportunity to vote on a massive trade deal that replaces the quarter-century-old North American Free Trade Agreement.
But the global economy has changed since NAFTA went into effect in January 1994. The internet has revolutionized the way consumers purchase goods and services. Today, people can order virtually any product from online retailers and have it delivered within days or even hours. When NAFTA was written, Amazon didn't exist. Many people hadn't heard of the internet. The fax machine played a major role in communications. As a result, NAFTA contained few provisions related to e-commerce.
Consider USMCA's section on agriculture. In 2017, the United States exported $24 billion and $19 billion worth of agricultural products to Canada and Mexico, respectively. These two countries represent America's largest and third-largest agricultural markets in the world. And these exports support 325,000 American jobs.
The new deal also dictates that 40 to 45 percent of auto content sold in North America be manufactured by workers earning a minimum of $16 an hour. This provision will incentivize companies to manufacture more vehicles and vehicle parts at their U.S. and Canadian factories. Recognizing the integral role of mom-and-pop shops, USMCA devotes an entire chapter to small and medium-sized businesses. The chapter includes provisions that cut down on the paperwork for express shipments valued below $2,500 and eliminate duties and tariffs on all shipments up to 40 Canadian dollars Lower costs and fewer administrative hassles will increase revenues, allowing firms to raise wages and hire new workers.
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