New NAFTA Replacement Trade Deal Approved

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New NAFTA Replacement Trade Deal Approved

An agreement between the United States, Canada and Mexico to replace the twenty-five-year-old NAFTA trade deal has finally been reached after months of negotiations and speculation over whether the trade agreement could be maintained.

Quickly Ratified

Representatives from the countries, who make up the continent of North America, signed the new trade agreement in Mexico just hours after Democrats in the House of Representatives agreed to support the deal.

An initial deal to replace NAFTA (North America Free Trade Agreement) had been proposed earlier this year. Politicians from both sides of the American political sphere have praised the agreement, particularly after new changes concerning environmental issues and labour practices were introduced.

USMCA

The new deal, titled the US-Mexico-Canada Agreement (USMCA), has been met with relief from key industries that rely on easy trade between the nations, particularly in manufacturing and agriculture.

Despite the fact that talks on the agreement finished almost a year ago, politicians in each of the nations have been debating its key points and disagreeing on its content. Before the agreement can come into effect, the governments of all three nations must approve it before it can be enforced by global trade organizations.

One of the big features of the new agreement requires car companies to use a higher percentage of North American made parts to qualify for tariff-free status, which many are hoping will help boost the fledgeling manufacturing industries in all three countries.

Notable Changes

Top Democrats, including House Speaker Nancy Pelosi, stated that their agreement to support the deal comes after significant changes were made to the original proposal.

Representatives from key industries – including manufacturing and farming – in the United States have now pushed for Congress to vote on the agreement as soon as possible to prevent further uncertainty in trade.

However, some critics – particularly in Mexico – have suggested that the new agreement is simply a differently worded version of NAFTA and will make little change in the long term.

Repealing and replacing NAFTA was one of the US President’s campaign promises and has been called a victory for his turbulent administration. On multiple occasions, Mr Trump claimed NAFTA to be ‘the worst trade deal in history’.