Senate Approves USMCA Trade Deal Replacing NAFTA

Matt Posky
by Matt Posky
senate approves usmca trade deal replacing nafta

The U.S. Senate approved changes to the North American Free Trade Agreement on Thursday, effectively replacing the 26-year-old deal with the new United States–Mexico–Canada Agreement. USMCA embraces stronger automotive content rules for the region, updates language for new technologies, and enacts sweeping labor protections aimed at uplifting the Mexican workforce. As a byproduct, it’s also likely to discourage automakers from isolating themselves south of the U.S. border in an effort to secure cheap labor.

Passing with a 89-10 vote in the Republican-controlled Senate, USMCA also allows President Donald Trump to keep his campaign promise of replacing NAFTA — a pact he often referred to as “the worst deal in history.”

Approved by the House in December of 2019, USMCA was finalized in 2018 and will now replace the 1994 North American Free Trade Agreement. Trump vowed for years to renegotiate or outright abandon NAFTA, which he faulted with the loss of millions of U.S. factory jobs to Mexico. Despite strong headwinds throughout negotiations, the deal received widespread Republican support in Congress.

It also had much more support from Democrats than many expected. However, a few high-profile politicians on the left have faulted USMCA for not addressing environmental issues that were also missed by NAFTA. “Despite the fact that it includes very good labor provisions, I am voting against USMCA because it does not address climate change, the greatest threat facing the planet,” said Senate Democratic leader Chuck Schumer.

Senator Bernie Sanders expressed similar environmental concerns, adding he believed USMCA would fail to “stop the outsourcing of American jobs to Mexico, China and other low-wage countries.” Sen. Elizabeth Warren — who is also vying to run against Trump in the next election — voted to support.

The U.S. Trade Representative’s office wasted no time in promoting the increased environmental protections in the renegotiated deal, saying USMCA goes far beyond addressing air and water pollution by ensuring violations are easily enforceable. But environmental groups like Sierra Club seem largely unconvinced. It said more needs to be done to stop companies from polluting.

For our purposes, the most noteworthy regulatory changes include a shift that requires increased North American content in cars and trucks. At least 75 percent of vehicle content must come from the region to receive tariff-free treatment, with additional mandates imposed on North American steel and aluminum. Likewise, USMCA stipulates that 40-45 percent of vehicle content must come from areas paying over $16 an hour.

Mexican legislators approved USMCA last month. Canada is expected to revisit the matter once parliament is back in session on January 27th.

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  • Master Baiter Master Baiter on Jan 18, 2020

    Trump is winning on multiple fronts and will cruise to re-election in 2020. The ignorance in the comments regarding climate change never ceases to amaze. There is a whole range of future climate scenarios generated by the models; the worst case scenarios rely on positive feedback effects of increased CO2. Anyone who knows anything about control systems would know that, based on the relative stability of the climate over the last billion years, the likelihood of positive feedback in the climate system is vanishingly small. In fact, strong negative feedbacks must be present to keep the climate as stable as it has been. The media latches onto the worst case scenarios and reports that to the uninformed masses to generate clicks. The government loves the worst case scenarios because it gives them an excuse to tax energy at confiscatory rates in the name of saving the planet.

    • See 8 previous
    • Vulpine Vulpine on Jan 21, 2020 CO2 is not what you need to worry about; it's only an indicator. It's methane and other gasses that the rising temperatures will release and ARE releasing, which are true greenhouse gasses. Even excess water vapor in the upper atmosphere, as seen from the white contrails from jet aircraft (and prop aircraft around 20,000 feet) is considered a greenhouse gas.

  • on Jan 21, 2020

    Is the thread dead yet?

  • Jeff S Some of us don't care either way we are not into this type of car. Most of these will be stored in garages waiting for their value to go up. As someone above noted this is an old body style which is retro 70s Challenger which after researching it came out in the 2008 MY which means a long run for a model that is in its 16th year. I have always liked these but if I bought one I would not spend this kind of money on one probably get the V-6 version and use it as a family car but then I am not into drag racing or muscle cars. For the type of car it is it has a decent rear seat and not too bad of a trunk. Most of us are not going to spend 100k for any vehicle at least currently so its not something most of us will buy and stick in a garage waiting for its value to increase. I am glad that these editions came out for those who can afford them and it keeps a little more color into what has become a very dull vehicle market but then with age I pick the dull appliance like reliable vehicle because that's what I need. Impressive car but not for me.
  • Jonathan The Germans. So organized they can appear disorganized. I agree with some others, classic names like Thunderbird, Imperial, Grand Prix, Ambassador etc. just have more appeal.
  • Bobbysirhan A friend had one when they first came out. He was CFO of some green California company and could charge the Volt at work. At home, the PHEV gave him an excuse to make his wife park her nicer car outdoors while the Volt get their condo's one-car garage. He liked the Volt, and he spent very little on energy during the 'first one's free!' era of EV ownership. Of course, the green company went bust soon after, and he wound up with a job that involved far more driving and ultimately the need for a more substantial car. I drove the Volt once after his wife had made a return trip to Los Angeles, depleting the battery. I don't know what a first gen Volt drives like with a charged battery, but it was really gutless with two adults, a yellow lab, and a dead battery. My other memory of it was that it had a really cramped back seat for a car that was about as large as a Civic. My friend who bought it liked it though, and that's not always been the case for GM vehicles.
  • MrIcky I think the Shakedown is more my speed of the last call editions- but this is impressive.
  • Dukeisduke I tried watching the live reveal last night, but after 15 minutes of jawing by MT+ personalities (and yes, I like Chris Jacobs and Alex Taylor), I turned it off.