The newly introduced trade pact between United States, Mexico and Canada, replacing a decade-old NAFTA (North American Free Trade Agreement), yet to be ratified, could proffer a modest boost to US economy, while its auto parts production is expected to receive a lift, but vehicle assembly limit and consumer’s choice in cars could have been hampered, US International Trade Commission said on Thursday, the 18th of April 2019.
The report of US International Trade Commission is considered to be a critical push for the US Congress to decide on a ratification of the newly introduced US-Mexico-Canada agreement, signed between the US President Donald Trump and leaders of other two parties last year to replace a 25-year-old North American Free Trade Agreement.
According to the report, the new NAFTA deal, termed as USMCA, would likely to boost US real gross domestic product (GDP) by 0.35 percent or nearly $68.5 billion on an annual basis, and would add more than 1,75,000 US jobs alongside raising US exports.
The report also added that US auto industry employment would rise by 30,000 jobs on vehicles parts and engine production, however, US vehicle would likely to decline, as the new USMCA deal required 75 percent of a vehicles’ value to be sourced in North America versus current 62.5 percent.
Adding that he was pleasantly surprised over the results, a White House Economic Adviser, Kevin Hassett said to the press over a telephone interview, “Their estimate is a lot closer to what we think USMCA will do than I expected. This is very strong argument for passing the USMCA”.