Please ensure Javascript is enabled for purposes of website accessibility

Poorest Americans Dealt Biggest Blow Under Senate Republican Tax Package

19 hours ago

Trump Vowed to Dismantle MS-13. His Deal With Bukele Threatens That Effort.

22 hours ago

Ukraine Voices Concern as US Halts Some Missile Shipments

23 hours ago

Poll: Most Americans Say National Divide, Political Violence Threaten Democracy

23 hours ago

Paramount Settles With Trump Over ‘60 Minutes’ Interview for $16 Million

23 hours ago

Republicans Tee up House Vote on Trump Bill, Outcome Uncertain

23 hours ago

What’s Next for Sean ‘Diddy’ Combs After His Sex Trafficking Trial?

23 hours ago

Dalai Lama Says He Will Be Reincarnated, Trust Will Identify Successor

24 hours ago
How NAFTA 2.0 Will Shake up Business as Usual
gvw_ap_news
By Associated Press
Published 7 years ago on
October 2, 2018

Share

WASHINGTON — American dairy farmers get more access to the Canadian market. U.S. drug companies can fend off generic competition for a few more years. Automakers are under pressure to build more cars where workers earn decent wages.

The new United States-Mexico-Canada Agreement replaces the 24-year-old North American Free Trade Agreement, which tore down trade barriers between the three countries.
The North American trade agreement hammered out late Sunday between the United States and Canada, following an earlier U.S.-Mexico deal, shakes up — but likely won’t revolutionize — the way businesses operate within the three-country trade bloc.
The new United States-Mexico-Canada Agreement replaces the 24-year-old North American Free Trade Agreement, which tore down trade barriers between the three countries. But NAFTA encouraged factories to move to Mexico to take advantage of low-wage labor in what President Donald Trump called a job-killing “disaster” for the United States.
Sunday’s agreement is meant to bring manufacturing back to the United States. The president, never known for understatement, said the new deal would “transform North America back into a manufacturing powerhouse.”
But America had to make some concessions, too. For example, it agreed to retain a NAFTA dispute-resolution process that it wanted to jettison but Canada insisted on keeping.
Overall, financial markets were relieved the countries reached a deal. For a time, it had looked like Trump might pull out of a regional free trade pact altogether — or strike one without Canada, America’s No. 2 trading partner. At noon Monday, the Dow Jones industrial average was up more than 240 points.
Economists, trade attorneys and businesses are still parsing the agreement. But here’s an early look at what it means for different players.

How Dairy Famers Are Affected

Trump has raged about Canada’s tariffs on dairy imports, which can approach 300 percent. American dairy farmers have also complained about Canadian policies that priced the U.S. out of the market for some dairy powders and allowed Canada to flood world markets with its own versions.

“The U.S. dairy industry seems happy … for now.”Trade attorney Daniel Ujczo
The new agreement ends the discriminatory pricing and restricts Canadian exports of dairy powders. It also expands U.S. access to up to 3.75 percent of the Canadian dairy market (versus 3.25 percent in the Trans-Pacific Partnership agreement the Obama administration negotiated but Trump nixed his first week in office). Above that level, U.S. dairy farmers will still face Canada’s punishing tariffs. And the “supply management” system Canada uses to protect its farmers is still largely in place.
Still, trade attorney Daniel Ujczo of the Dickinson Wright law firm said that “the U.S. dairy industry seems happy … for now.”
Photo of members of the Dairy Farmers of Canada
FILE – In this Sept. 19, 2018, file photo, members of the Dairy Farmers of Canada hold a news conference in Ottawa, Ontario. American dairy farmers get more access to the Canadian market. U.S. drug companies can fend off generic competition for a few more years. Automakers are under pressure to build more cars where workers earn decent wages. (Adrian Wyld/The Canadian Press via AP, File)

Shaking Things up for Automakers

NAFTA remade the North American auto market. Automakers built complicated supply chains that straddled NAFTA borders. In doing so, they took advantage of each country’s strengths — cheap labor in Mexico, and skilled workers and proximity to customers in the United States and Canada.
The new agreement changes things up. For one thing, the percentage of a car’s content that must be built within the trade bloc to qualify for duty-free status rises to 75 percent from 62.5 percent. A bolder provision requires that 40 percent to 45 percent of a car’s content be built where workers earn $16 an hour.
That is meant to bring production back to the United States or Canada and away from Mexico (and perhaps to put some upward pressure on Mexican wages).
The provisions could drive up car prices for consumers. The new deal also provides some protection to Canada and Mexico if Trump goes ahead with his threat to slap 20 percent to 25 percent taxes on imported cars, trucks and auto parts. It would exclude from the proposed tariffs 2.6 million passenger vehicles from both Canada and Mexico.

The Impact on Multinational Companies

Like other U.S. trade agreements, NAFTA allowed multinational companies to go to private tribunals to challenge national laws they said discriminated against them and violated the terms of the trade agreement. Critics charged the process gave companies a way to get around environmental and labor laws and regulations they didn’t like, overruling democratically elected governments in the process.
U.S. Trade Rep. Robert Lighthizer, who negotiated the new deal, had another complaint: The tribunals took some of the risk out of investing in unstable or corrupt countries such as Mexico. Why, Lighthizer argued, should the United States negotiate deals that encourage investment in other countries? The new pact scales back provisions protecting foreign investment. Lori Wallach, director of Public Citizen’s Global Trade Watch and a sharp critic of NAFTA, praised the new agreement for reining in what she called NAFTA’s “outrageous” tribunal system that had allowed big companies to launch “attacks on environmental and health policies.”

A Windfall for Drug Companies

“New monopoly privileges for pharmaceutical firms … could undermine reforms needed to make medicine more affordable here.” — Lori Wallach, director of Public Citizen’s Global Trade Watch
The new trade pact delivers a windfall to pharmaceutical companies that make biologics —ultra-expensive drugs produced in living cells. It gives them 10 years of protection from generic competition, up from eight the Obama administration had negotiated in the TPP.
But good news for the pharmaceutical industry could be bad news for users of the drugs and for government policymakers trying to hold down health-care costs.
“New monopoly privileges for pharmaceutical firms … could undermine reforms needed to make medicine more affordable here and increase prices in Mexico and Canada, limiting access to lifesaving medicines,” Wallach said.

Some Retailers Benefit, Others Do Not

The United States pressured Canada and Mexico to raise the dollar amount that shipments must reach before they become subject to import duties. Canada, for instance, will allow tax- and duty-free shipments worth up to 40 Canadian dollars (about $31), up from 20 Canadian dollars ($16) under NAFTA.
The change makes U.S. products more competitive in Canada because they will be subject to less tax at the border — and delivers savings to Canadians who shop online. However, trade attorney Ujczo notes, the higher threshold poses a threat to Canadian retailers.

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

House Republicans Say They Expect to Vote Tonight on Trump’s Tax-Cut Bill

DON'T MISS

San Luis Obispo’s Madre Fire Grows to 8,300 Acres, Prompts Evacuations

DON'T MISS

SLO Deputies Fatally Shoot Man in Los Osos Weeks After US Marshal Impersonation Arrest

DON'T MISS

Madera County Deputy Injured, Wanted Felon Arrested After Violent Struggle

DON'T MISS

San Luis Obispo County Wildfire Burns More Than 3,000 Acres. No Containment Yet

DON'T MISS

Wired Wednesday: Why Is State Lawmaker Taking Aim at Rooftop Solar?

DON'T MISS

Two Visalia Men Sentenced in 2021 Motel Killing

DON'T MISS

Ex-Jan. 6 Defendant Gets Life in Prison for Plot to Kill FBI Agents

DON'T MISS

Del Monte Files for Bankruptcy. Gets Nearly $1B to Keep Producing Through Process

DON'T MISS

Who is Running for Fresno Area Offices in 2026? An Updated Look

UP NEXT

Poll: Most Americans Say National Divide, Political Violence Threaten Democracy

UP NEXT

Trump Pulls Back 150 Guard Troops From Federal Duties in California

UP NEXT

Suspect Identified in Ambush Shooting That Killed 2 Idaho Firefighters

UP NEXT

Suspect Identified in Ambush Shooting That Killed 2 Idaho Firefighters

UP NEXT

US Supreme Court Lets Parents Take Kids Out of Classes With LGBT Storybooks

UP NEXT

Bill Moyers, Broadcaster and LBJ’s White House Press Secretary, Dies at 91

UP NEXT

Tesla Executive, Elon Musk Confidant Leaves EV Maker, Bloomberg News Reports

UP NEXT

How a Birthday Boat Ride on Lake Tahoe Turned Tragic

UP NEXT

Cuomo Concedes to Mamdani in New York City Democratic Mayoral Contest

UP NEXT

Mamdani Holds Lead Over Cuomo in Democratic Primary for NYC Mayor

US Supreme Court to Decide Legality of Transgender School Sports Bans

19 minutes ago

Supreme Court’s Conservatives Leaned Into US Culture Wars With Transgender Cases

21 minutes ago

San Luis Obispo’s Madre Fire Grows to 35,000 Acres, More Evacuations Ordered

29 minutes ago

Nvidia Set to Become the World’s Most Valuable Company in History

36 minutes ago

There Are Fresno Area Fireworks Shows Galore Through Sunday

42 minutes ago

Poll: 41% in US ‘Extremely Proud’ to Be American, Near Historic Low

42 minutes ago

House Republicans Say They Expect to Vote Tonight on Trump’s Tax-Cut Bill

16 hours ago

San Luis Obispo’s Madre Fire Grows to 8,300 Acres, Prompts Evacuations

16 hours ago

SLO Deputies Fatally Shoot Man in Los Osos Weeks After US Marshal Impersonation Arrest

16 hours ago

Madera County Deputy Injured, Wanted Felon Arrested After Violent Struggle

16 hours ago

US Imposes New Sanctions Targeting Iran Oil Trade, Hezbollah, Treasury Dept Says

The United States imposed sanctions on Thursday against a business network that smuggles Iranian oil disguised as Iraqi oil, as well as sanc...

6 minutes ago

Treasury Secretary Scott Bessent speaks to reporters at the U.S. Capitol as Republican lawmakers struggle to pass U.S. President Donald Trump?s sweeping spending and tax bill, on Capitol Hill in Washington, D.C., U.S., June 27, 2025. (Reuters File)
6 minutes ago

US Imposes New Sanctions Targeting Iran Oil Trade, Hezbollah, Treasury Dept Says

9 minutes ago

Keep Pets Safe on 4th of July: Fresno County Animal Shelter Offers Tips

A view shows the dome of the U.S. Capitol, in Washington, D.C., U.S., July 3, 2025. (Reuters File)
15 minutes ago

US House Republicans Head Toward Final Vote on Trump’s Sweeping Tax-Cut Bill

A general view of the U.S. Supreme Court building in Washington, U.S., June 1, 2024. (Reuters File)
19 minutes ago

US Supreme Court to Decide Legality of Transgender School Sports Bans

Demonstrators attend a Transgender Day of Visibility rally on the National Mall in Washington, D.C., U.S., March 31, 2025. (Reuters File)
21 minutes ago

Supreme Court’s Conservatives Leaned Into US Culture Wars With Transgender Cases

A wildfire near New Cuyama in San Luis Obispo County has burned more than 35,000 acres, prompted multiple evacuation orders, and is just 5% contained as crews from several agencies battle the blaze. (CalFire)
29 minutes ago

San Luis Obispo’s Madre Fire Grows to 35,000 Acres, More Evacuations Ordered

Nvidia products are displayed after its CEO Jensen Huang made a keynote speech at Computex in Taipei, Taiwan May 19, 2025. (Reuters File)
36 minutes ago

Nvidia Set to Become the World’s Most Valuable Company in History

42 minutes ago

There Are Fresno Area Fireworks Shows Galore Through Sunday

Help continue the work that gets you the news that matters most.

Search

Send this to a friend