New NAFTA deal could have impact on regional auto industry
The United States, Mexico and Canada have reached agreement on a new tri-lateral trade alliance. Formerly known as the North American Free Trade Agreement (NAFTA), the president prefers calling this re-worked deal the United States-Mexico-Canada Agreement (USMCA).
It's provisions leave a lot of the NAFTA terms in place but there are some differences.
Canada agreed to terms Sunday night.
Monday morning, President Trump said at the Rose Garden press conference announcing the new alliance, "Throughout the campaign I promised to renegotiate NAFTA and today we have kept that promise."
Trump campaigned in Ohio during the 2016 presidential race advocating for a renegotiated NAFTA deal. Ohio has a strong manufacturing and farming base that some believe has suffered due to the NAFTA deal approved in the 1990s.
Mister Trump insisted his new trade deal with transform North America into a manufacturing powerhouse.
Trump told reporters, "Once approved by Congress, this new deal will be the most modern, up to date and balanced trade agreement in the history of our country, with the most advanced protections for workers ever developed."
The biggest impact may be on auto-manufacturing, both nationally and in Ohio. This new trade deal requires more of the cars we drive be made in North America.
The Toledo Regional Chamber of Commerce is still analyzing the details of a deal just released to the media Sunday night.
But a possible winner could be the Toledo built Jeep Wrangler. Six-thousand jobs in our area depend on wranglers and the auto industry.
The USMCA requires 40-percent of cars sold in North America be made by workers earning at least $16 an hour. That's good for Ohio auto workers, bad for Mexico's cheap labor.
Brian Dicken, the VP for Advocacy and Public Policy with the Toledo Regional Chamber of Commerce says, "Given a level playing field (US auto workers) can compete with anybody on producing products we want and need."
And if the president insists on imposing higher tariffs on foreign made cars, watch Asian and European car makers.
Dr. Andrew Solocha, professor of International Finance at the University of Toledo says, "If they impose a tariff on cars like Trump has proposed, that will mean they have to build their cars here."
That could mean more jobs, more auto production, more distribution from and through Northwest Ohio.
Manufacturers of durable goods like washing machines could benefit and Ohio dairy farmers-- who have little access to Canadian markets--will get a little more help in this deal.
But the region's access to the Ohio turnpike and I-75, the Port of Toledo and a variety of railroads could make this reworked USMCA a better deal for Ohio than NAFTA.