President Trump on Wednesday signed into law a major rewrite of the rules of trade with Canada and Mexico that he said replaces the "nightmare" of a Clinton-era agreement and will keep jobs, wealth, and growth in America. "Together we are building a glorious future that is raised, grown, built and made right here in the glorious USA," Trump said in an outdoor signing ceremony at the White House, where the invitation list included more than 70 Republican members of Congress but no Democratic legislators. Canada and Mexico already represent the top two export markets for US goods. But the new pact, along with the signing of a “phase one” agreement with China, dials down trade tensions that contributed to slowing economic growth globally. Details from the AP:
- The leaders of the US, Canada, and Mexico signed the deal in late 2018. Legislation implementing it received overwhelming, bipartisan support in Congress after several months of behind-the-scenes negotiations between Democratic lawmakers and the Trump administration. Trump made a point of praising Republican legislators for their work in passing the deal but did not mention the role of Democrats, who said that even if they weren't invited to the signing ceremony, their influence was being felt.
- NAFTA, which took effect in 1994 under President Bill Clinton, tore down trade barriers between the three North American countries and commerce between them surged. But Trump and other critics said NAFTA encouraged factories to leave the United States and relocate south of the border to take advantage of low-wage Mexican labor. Trump threatened to leave NAFTA if he couldn't get a better deal, creating uncertainty over regional trade.
- His trade negotiator, Robert Lighthizer, pressed for a revamped pact designed to bring factory jobs back to the United States. The new agreement, for example, requires automakers to get 75% of their production content (up from 62.5% in NAFTA) from within North America to qualify for the pact's duty-free benefits. That means more auto content would have to come from North America, not imported more cheaply from China and elsewhere.
- The independent US International Trade Commission last year calculated that the US-Mexico-Canada deal would add 0.35%, or $68 billion, to economic growth and generate 176,000 jobs over six years—not much of a change for a $22 trillion economy with 152 million nonfarm jobs.
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