The 5 surprising things about the new USMCA trade agreement



Chad P. Brown | The Washington Post

There’s a new U.S.-Mexico-Canada trade agreement after more than a year of high-stakes drama. President Trump’s fingerprints are all over the deal, announced Sept. 30, a renegotiation of the North American Free Trade Agreement (NAFTA), which took effect in 1994.

Trade deals typically aim to boost commerce among countries. What’s different about the U.S.-Mexico-Canada Agreement (USMCA)? Trump’s signature innovations showcase new attempts to make this type of deal result in less trade, not more. Here are four novel, trade-restricting elements:

1. New rules for how to make a (North) American car mean less trade in autos

The Trump administration demanded a new approach for how automakers in Mexico and Canada must build cars and trucks to continue selling to U.S. consumers without having to pay import tariffs. The USMCA tightened NAFTA’s already complex “rules of origin” — the requirements to qualify for the zero tariff — and mandated that even more parts be sourced from North America, even if the parts are costlier than those available elsewhere. And for the first time, a minimum amount of a car must be produced by workers earning above a certain wage.

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