In a conference call this morning the United States White House announced that it had reached a preliminary trade deal with Mexico. The new agreement would be called the “United States – Mexico Trade Agreement”.
The tentative deal modifies key portions of NAFTA to modernize the agreement to accommodate for the internet and e-commerce, which were not factors 24 years ago when NAFTA was first negotiated. The agreement would change the rules of origin for automobiles, by increasing the required content from the United States to 75%, from its original 62.5%. The agreement also includes a provision that requires a significant portion of all automobiles to be manufactured in “high-wage” factories, which is a measure aimed at keeping jobs in the United States.
This is a significant breakthrough in a NAFTA negotiation process that has been going on for more than a year. Formal talks between Canada, Mexico and the United States had broken off in May. The United States resumed talks bilaterally with Mexico several weeks ago. Now that the United States and Mexico have agreed to terms, it is expected that Canada will have an opportunity to review the agreement and enter into formal negotiations.
The participating countries will continue to work toward finalizing a deal that would need to be approved by their legislative bodies.
As more details become available, MIQ Logistics will keep you updated.
For additional information, contact your local MIQ Logistics representative