MEXICO CITY — The U.S.-Mexico-Canada Agreement — a trade deal that overhauls the Clinton-era North American Free Trade Agreement (NAFTA) — is poised to take effect next year after the U.S. House of Representatives agreed this week to bring it up for a vote.
U.S. Trade Representative Robert E. Lighthizer, Mexican Deputy Foreign Minister Jesus Seade and Canadian Deputy Prime Minister Chrystia Freeland signed the 2,000-plus-page document —which now has the support of congressional Democrats and labor unions after changes on workers' rights, environmental protections and other issues — Dec. 10 in Mexico City.
Organizations as diverse as the United Steelworkers (USW) union, Motor & Equipment Manufacturers Association (MEMA), Auto Care Association (ACA), National Retail Federation (NRF) and National Association of Manufacturers (NAM) expressed approval of the USMCA.
In a statement after the signing, Mr. Lighthizer praised President Trump for his leadership in bringing the trade agreement to fruition.
"After working with Republicans, Democrats and many other stakeholders for the past two years, we have created a deal that will benefit American workers, farmers and ranchers for years to come," Mr. Lighthizer said. "This will be the model for American trade deals going forward."
Replacing NAFTA with the USMCA was a key campaign pledge for Mr. Trump, who has often called NAFTA the worst trade deal in history.
The U.S. House of Representatives is expected to vote the week of Dec. 16 to approve the USMCA, but Senate Majority Leader Mitch McConnell has indicated the Senate will not vote on the trade agreement until the impeachment trial of President Trump next year.
House Democrats approved two articles of impeachment against Trump Dec. 19, and the House is expected to approve those articles on a strict party-line vote.
Among other provisions, the USMCA would require vehicle makers in all three countries to obtain 75% of their automotive content from within North America to qualify for duty-free benefits in transporting vehicles and parts across borders. This is up from 62.5% under NAFTA.
Also, at least 40% of vehicles' components would have to originate in places where hourly wages are at least $16.
The pact would require Mexico to allow workers to form independent unions. Traditionally and under NAFTA, Mexican unions were mostly employer-controlled, a prime reason for Mexican wages being much lower than those in the U.S. or Canada. The labor provisions of the USMCA are expected to create an estimated 175,000 U.S. jobs.
USW International President Thomas Conway endorsed the revised USMCA in a statement after the deal was announced.
NAFTA, Mr. Conway said, "cost countless jobs, ravaged families and communities and pulled down wages as companies have outsourced jobs and production to Mexico.
"The updated draft agreement now has enforcement provisions that can help make a difference," Mr. Conway said. "There is still a great deal of work to do in terms of implementing, monitoring and enforcing the provisions, but the base for progress is there."
ACA President and CEO Bill Hanvey reiterated his organization's strong support for the agreement.
"The trilateral agreement will strengthen trade and maintain tariff-free market access to two of our most important trading partners, accounting for more than 70% of total U.S. auto parts exports," Mr. Hanvey said.
"We encourage Congress to move swiftly to ratify the bill to maintain our industry's global supply chain, protect American jobs and ensure market stability for current and future investments."
MEMA, which came out early in its support for the USMCA, called for a "quick consideration" of the deal.
"While we still need to learn more about the details of the plan, we like what we hear so far," MEMA said.
The NAM expressed qualified support for the revised USMCA.
"We are extremely disappointed that this agreement missed an opportunity to set the gold standard for the protection of American-made lifesaving innovations and inventions," NAM President and CEO Jay Timmons said.
"Nevertheless, a ratified USMCA will deliver increased certainty to manufacturers — especially for the 2 million manufacturing workers whose jobs depend on North American trade," Mr. Timmons said.
NRF President and CEO Matthew Shay said the agreement takes many important steps to modernize the now-antiquated provisions of NAFTA.
"The agreement could not come at a better time and provides certainty for U.S. retailers that rely on the North American market," Mr. Shay said. "It also ensures American families can continue to have access to a wide range of high-quality products at prices they can afford."
U.S. Chamber of Commerce CEO Thomas Donohue called for the "expeditious passage" of the USMCA by both houses of Congress, but at the same time expressed concerns about some of the deal's ommissions, includuing the removal of certain intellectual property provisions.
"Going forward, the outcome in the area of intellectual property cannot stand as a precedent for future agreements. More than 45 million American jobs and $6.6 trillion in GDP depend on IP-dependent industries, including 5 million in the biopharmaceutical sector and 5 million more in the creative industries, and this is where future U.S. competitiveness lies. We will redouble our efforts to demonstrate this to our elected leaders in the months and years ahead."