President Donald Trump announced on Monday from the Oval Office that the United States and Mexico have reached a new agreement on the North American Free Trade Agreement (NAFTA) and that the administration will immediately begin working with Canada on a deal.
Reuters reports that the new deal will require that "75 percent of auto content to be made in the NAFTA region, up from the current level of 62.5 percent" and will require "40 percent to 45 percent of auto content to be made by workers earning at least $16 per hour."
The White House said in a statement that the new agreement "grows the economy, supports high-paying jobs for American workers, and protects American intellectual property" and is a win for "farmers, ranchers, workers, and businesses."
The Press Secretary's Office added that the preliminary agreement will benefit America in the following ways:
- New “rules of origin” requirements to incentivize billions a year in vehicle and automobile parts production in the United States, supporting high-wage jobs.
- The strongest, fully enforceable labor standards of any trade agreement.
- New commitments to reduce trade-distorting policies for agricultural goods.
- Improvements enabling food and agriculture to trade more fairly.
- Strong and effective intellectual property protections.
- The strongest disciplines on digital trade of any international agreement.
- The most robust transparency obligations of any United States trade agreement.
"I'll be terminating the existing deal and going into this deal," Trump said. "It’s a big day for trade. It’s a big day for our country."
"They used to call it NAFTA. We’re going to call it the United States-Mexico trade agreement. We’ll get rid of the name NAFTA,” Trump continued, adding that the name had a "bad connotation."
Trump noted that Canada, which is currently not part of the new deal, could either join depending on how negotiations go or there could be a separate deal with Canada altogether.
"We are starting negotiations with Canada pretty much immediately," Trump said.