The Mexican expert was told about the details of the new agreement USMCA

© AFP 2018 / Guillermo Agahuseyn on the border of Mexico and the United States. Archival photoThe Mexican expert was told about the details of the new agreement USMCA© AFP 2018 / Guillermo Arias

The new agreement USMCA between Mexico, Canada and the United States is in effect since 1994, NAFTA may prove to be not only a victory for the US, but also to create for this country a number of problems, says financial analyst, Professor of the National Autonomous University of Mexico Clemente Ruiz Duran.

Earlier, the United States, Canada and Mexico reached a trilateral trade agreement that will now be called the USMCA is NAFTA. The President of the United States Donald trump is hoping to sign an agreement before the end of November, the deal still must be approved by the parliaments of the three countries.

«This supposed victory of the team of negotiators trump may have a negative effect for the Americans in connection with rising prices for buyers of cars and possible plans for transfer of motor production to countries with lower cost of work, such as China,» said Ruiz Duran RIA Novosti.

According to the analyst, the text of the agreement includes changes in the areas of new rules for passenger cars and trucks, to manufacture them in countries with higher salaries; the reduction of barriers to products of American dairy producers in Canada; preservation of the court for dispute resolution, which the United States planned to close; the guarantee of increased access to canadian and Mexican manufacturers of cars and light trucks to the U.S. market.

«However, uncertainty remains as to the removal of American duties on shipments of steel and aluminum in the United States. Undoubtedly, if you save these fees will worsen the situation with the production of these metals in Mexico and Canada,» — said the expert.

He recalled that the rules of NAFTA required that at least 62.5% of each vehicle produced in North American countries apply zero rates of tariff. The new agreement raises this threshold to 75%. «The goal is to get the manufacturers of cars to use for each car assembled in Mexico or Canada, less parts from countries such as Germany, Japan, South Korea or China,» said Ruiz Duran.

For the first time, the new agreement also commits to provide for a gradual increase (up to 40% by 2023) details of each machine, manufactured in factories with so-called «high salary». The agreement States that such plants have to pay at least $ 16 per hour average wage of their workers. «This is almost three times higher than the average salary for a Mexican factory at the moment, and the Americans hope that this will force manufacturers to change Mexican suppliers (cars) in American or canadian» — he said.

The new agreement also includes additional acts which provide exemption from any future tax of $ 2.6 million passenger cars imported from each of the three countries. «It’s a bit more than the number of vehicles that Mexico shipped to the United States last year, and nearly 1 million more than it exported there in Canada,» added Ruiz Duran.

One of the most important was the question of the protection of the canadian dairy market from imports from the United States, given government support for canadian producers in international markets. «The new agreement gradually opens canadian market for the supply of American dairy products, including liquid milk, cream, butter, powdered milk, cheeses and other products. Canada agreed to cancel the program, which helps canadian sellers of these products at home and abroad», — said the expert.

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