NAFTA Updated Agreement Looks To Benefit Automakers
The United States and Canada came to agreement in late September about proposed revisions to The North American Free Trade Agreement (NAFTA) that could benefit the U.S. auto industry from job-killing tariffs for building vehicles in Mexico and Canada.
The changes are incremental and involve changes to autos, agriculture, intellectual property and other aspects of trade among the United States, Canada and Mexico.
“While we still need to carefully review the text of this proposal, this is an encouraging development,” stated the Auto Alliance association. “The North American auto industry needs to have all three countries included in the agreement to realize the benefits and goals of a new pact. We have said all along that it is key that the United States, Mexico and Canada maintain this agreement as a trilateral pact.”
The new agreement must be ratified by Congress in 2019, but could be amended depending on the outcome of mid-term elections.
The new NAFTA does not address steel and aluminum, currently subject to tariffs. But the deal will encourage automakers and auto parts companies to buy and build more parts in the United States. The new agreement also gets rid of tariffs that Trump was going to level on both countries. Trade agreements still need to be reached with the European Union over trade policy that will impact German auto manufacturers exporting vehicles to the United States, though they also build most of the vehicles they sell in the United States are built here and in Mexico and Canada.