WHAT TO KNOW ABOUT THE REVAMPED NAFTA DEAL

The negotiations for the new NAFTA deal ended last week and Canada joined the deal struck between US and Mexico at the 11^th hour. Here are key takeaways about this trade deal:

• A new name: the USMCA (US-Mexico-Canada Agreement);
• Car industry: 75% of car parts to be made across these 3 counties – which is up from current 62%.
• Labour costs: 30% of work hours must be at or above 16 dollars per hour (headwind for Mexico).
• Unions: New rules around allowing the formation of unions were included (again headwind for Mexico).
• Dairy market: the US gets access to the Canadian dairy market.
• Currency manipulation: Enforceable rules around not allowing deliberate currency weakening are to be noted as this is a sign of things to expect for a potential deal with China.
• IP: Increased IP protections, covers biotech and tech. Sign of things to come for China.