What Does a USMCA Trade Deal Mean to You?
While you were counting the days until 2020 so that we can avoid this exhausting year, a new trade deal was closed yesterday.
House Democrats have said they will support the USMCA, a trade deal signed by the United States, Canada and Mexico. This is a big deal for President Donald Trump, who has long wanted to break the existing trade agreement, NAFTA, and start over.
But just because we have closed a new trade deal with our neighbors does not mean that you will see sudden changes when it comes time to shop.
What’s this? How is it different from NAFTA?
The USMCA (United States, Mexico and Canada Agreement) is considered “new” NAFTA because it updates the trade agreement signed for the United States, Canada and Mexico back in 1994. Remember 1994? Yeah. Simpler times.
NAFTA has prescribed all the rules for trade between the three North American countries. The USMCA is now updating this agreement. In short, Speaker Nancy Pelosi said at a press conference that the USMCA is a “victory for the American worker.” The USMCA is expected to create several new jobs by strengthening regulations for doing business abroad, as well as strengthening intellectual property protection for creators and businesses, especially with regard to digital products.
What’s the timeline for this thing?
We’re not entirely sure. All three countries must ratify the agreement. The House of Representatives is scheduled to vote to approve the deal next week, but Senate Majority Leader Mitch McConnell said the Senate would not vote until Congress returns to sit in January 2020. Continued attention to impeachment proceedings could significantly delay this vote.
But given that this deal has been in the works for over a year , a few weeks won’t make much of a difference in real politics – they’ll just change the date when everything goes into effect and can be enforced.
What does this mean for my wallet?
The final text of the agreement has yet to be released, but there are two key areas in which you can most clearly see the impact of the USMCA.
Increasing the wages of workers in the automotive industry.
According to the USMCA, at least 30% of the work done to assemble a car or truck must be done by workers earning at least $ 16 an hour. According to the Washington Post, by 2023, at least 40% of this work should be done by workers who earn that much.
This may mean that cars will get a little more expensive, but it also means that we may see higher wages for more workers as a ripple effect of this rule.
Access to some generic drugs before
Right now, prescription branded biologics – those that aren’t made from chemical compounds – are protected for 12 years before they can be generically produced by competitors.
The original USMCA proposal reduced that timeframe to 10 years, but this rule was removed from the final version. This means you have a better chance of accessing cheaper generic versions of expensive recipes. Some popular biologics include those that treat diabetes, multiple sclerosis, rheumatoid arthritis, and some cancers.