The ongoing saga of the North American Free Trade Agreement renegotiations seems to have finally come to an end.
On Monday, President Trump announced a new trade deal with the United States’ North American trading partners. The agreement formerly known as NAFTA will now be called the United States-Mexico-Canada Agreement, or USMCA.
To experts already weighing in, the trade deal appears to be a marriage between the existing NAFTA and provisions of the defunct Trans-Pacific Partnership, which the U.S. negotiated with 11 other nations before Trump pulled the nation out as one of his first presidential orders of business.
In a White House statement Monday, Trump said, “USMCA is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our farmers and manufacturers, reduces trade barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world.”
The deal was reached with Canada Sunday night—just before the midnight deadline for settling an agreement on trade—and will be added into the deal already reached with Mexico.
USMCA will shift rules of origin to require 75 percent of auto manufacturing inputs to be produced in North America, American dairy products will gain better access to Canada, a “high-standard” chapter adds strong protection and enforcement of intellectual property rights, and the new deal “contains the strongest measures on digital trade of any agreement,” according to the White House statement.
With the details of the trade deal still under review, it’s early yet to tell just how the changes will impact apparel, footwear and textile supply chains, but American Apparel & Footwear Association(AAFA) President and CEO Rick Helfenbein said the organization intends to “remind the administration of the need to seamlessly implement this new agreement so that companies are able to adjust to the new trading rules.”
Last year, the value of shipments for U.S. textiles and apparel was $77.9 billion, and U.S. exports of fiber, textiles and apparel were $28.6 billion, according to data from the National Council of Textile Organizations (NCTO).
When it comes to textiles, the agreement may prioritize textile manufacturing in a way that NAFTA might not have.
“Unlike the original NAFTA, the new agreement includes a separate textile and apparel chapter,” NCTO president and CEO Auggie Tantillo said in a statement Monday. “This outcome is a tangible recognition by all three parties of the importance of textile manufacturing to the regional economy.”