Washington/Mexico City – The North American Free Trade Agreement (NAFTA) signed between the United States, Canada and Mexico 24 years ago has finally been scrapped. US President Donald Trump declared that a new bilateral trade agreement was signed between the United States and Mexico, on Monday. After leaving out Canada, which was previously a member of NAFTA, President Trump created a sensation by warning of additional taxes being imposed on Canada.
President Trump had fired a salvo of criticism at NAFTA saying that it was the ‘worst deal ever’ , causing complete devastation to the US workforce. Ever since Trump assumed power, he had been speaking against NAFTA and had clarified that NAFTA had no future. At the same time, he had promised to renegotiate with the participating countries, Canada and Mexico independently.
The Monday announcement shows that the negotiations with Mexico were successful. ‘This agreement was previously known as NAFTA, but now it will assume a different name. The new agreement will be known as the US-Mexico Trade Agreement. There are special provisions made for the US entrepreneurs and farmers in this agreement. It is an excellent agreement for the United States’ were the words used by President Trump to announce the signing of the trade agreement with Mexico.
The tax on agricultural produce from both the countries was brought down to zero. Moreover, 75% of the car parts traded between the two countries will now be manufactured in the concerned country. One condition states that the minimum wages of the workers required for the manufacture for at least 40% to 45% of the car parts have to be more than $16 per hour. Another provision in the agreement is to increase the use of Steel, Aluminium, Glass and Plastic manufactured in the United States.
Both, the United States and Mexico have expressed satisfaction over the agreement. At the same time, Trump has created a sensation by saying that it is easier to impose taxes on Canada rather than renegotiating a trade agreement.