US House approves continental trade agreement with Canada and Mexico

The United States lawmakers in the House of Representative reportedly approved a new continental trade agreement with Canada and Mexico on December 19. The law to implement the new US-Mexico-Canada Agreement (USMCA) passed by bipartisan majority with a vote tally of 385-41. Now that the bill has been approved, the bill now must be approved by the Senate, where the Republican majority leader has reportedly said that it will have to wait until 2020. 

According to international media reports, the UMSCA replaces the 25-year-old North American Free Trade Agreement. It also changes rules on auto manufacturing, e-commerce, intellectual property protection and dispute settlement for investors, as well as tougher labour provisions that require reforms to Mexico's labour laws. Both the major parties have now favoured the bill which is made it likely to win Senate approval and especially with Trump's support. However, according to reports, Pat Toomey, a Republican senator from Pennsylvania has announced his opposition. He claimed that the UMSCA is 'antitrade' and will raise auto prices while lower exports and employment. 

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Job hike in America

The free trade pact was reportedly signed in 2018, House Democrats had held up the treaty's ratification for a year, demanding greater assurances that Mexico could be held to its commitments to labour reforms demanded by the treaty. The International Trade Commission also projected that the USMCA would boost the economy by $68 billion and add 176,000 jobs six years after taking effect. According to reports, some of the biggest impacts would be felt in the U.S. automotive industry. It was also found that the new agreement would be creating 30,000 jobs in American auto parts plants. 

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However, on the downside, the commission found the pact would increase the cost of pickup trucks and cars. That would hurt demand and reduce the number of jobs in factories that assemble cars by about 1,500. The US President Trump, at times, seemed resigned to the assessment that the two sides would never reach a compromise. “She’s incapable of moving it,” Trump asserted of Pelosi just a few weeks ago. But according to reports, Trump’s point person on trade, U.S. Trade Representative Robert Lighthizer, was working with House Democrats on changes to address their concerns.

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