ZCZC
BCN-07
US-MEXICO-CANADA-TRADE-AUTO
New North America trade pact to have ‘moderate’ positive effect: US report
WASHINGTON, April 20, 2019 (BSS/AFP) – The North American trade pact signed
last year will have a “moderate” positive effect on the US economy, an
independent US report said Thursday, an underwhelming endorsement as it faces
an uncertain path to ratification.
After a year of tough negotiation, Washington, Ottawa and Mexico City in
November signed a new continent-wide trade deal to replace the 1994 North
American Free Trade Agreement and revamp rules on manufacturing, digital
commerce and labor rights, among other sectors.
But the boost to the US economy “is likely to be moderate,” given that most
tariffs were already dropped region-wide 25 years ago and because the United
States economy is much larger than those of Mexico and Canada, according to
the US International Trade Commission.
The report also found that the new deal — known as the United States-
Mexico-Canada Agreement — would likely make autos more expensive for US
consumers and actually decrease sales.
Earlier on Thursday, President Donald Trump’s administration had sought to
preempt criticism of how the deal will affect the auto sector, unveiling rosy
new predictions that USMCA would generate tens of billions in new investments
and more than 70,000 new jobs.
The report released Thursday said that total US GDP will increase by 0.35
percent under the agreement and that the US will gain 176,000 new jobs
compared to a scenario in which the current North American trade agreement
remained in place.
“The model estimates that the agreement would likely have a positive impact
on all broad industry sectors within the US economy,” the report found.
Trade between the United States, Mexico and Canada is also likely to
increase, according to the report — with US exports rising by about the same
amount as its imports from the two partners.
BSS/AFP/SR/2000 HRS