A new trade agreement has been reached between negotiators for the U.S., Canada and Mexico. The three countries have been working to do this for much of Donald Trump's term as U.S. President. A major promise he made in the campaign trail was that he'd renegotiate NAFTA, the North American Free Trade Agreement. The new deal which was reached on Sunday night is called the USMCA, the United States Mexico Canada Agreement.
It's not finalized. First, the leaders of all three countries have to sign it. President Trump says he plans to do that by the end of November. Then the legislatures of all three countries have to approve it. In the U.S. Congress, this involves the Senate which has the Constitutional authority to approve treaties and the House of Representatives which also has authority when treaties are related to foreign trade. And like NAFTA, the USMCA is all about trade between the three North American countries. It involves a lot of compromise between them. For one thing, the new agreement is expected to help American farmers by allowing them to send more dairy, poultry and eggs to Canada. But some Canadian dairy farmers are concerned it will hurt their business.
One criticism of NAFTA was it lead American auto makers to shift production to Mexico where it could be done less expensively because workers there earn less money. The USMCA is intended to encourage U.S. carmakers to do more of their manufacturing in the U.S. but critics say it could lead them to do more in Asia. So what will actually happen? Time will tell.