President Donald Trump is seeking to abandon the US-Mexico-Canada Agreement (USMCA), a trade deal he once hailed as the “fairest, most balanced, and beneficial trade agreement we have ever signed.” However, withdrawing from the deal is complicated and may require congressional approval.
Background
The USMCA, which replaced the North American Free Trade Agreement, facilitates roughly $2 trillion in annual trade among the three neighboring countries. Supply chains, particularly in the auto industry, depend on the agreement’s duty-free provisions.
After conducting a virtual meeting with trade leaders from Mexico and Canada, the Trump administration failed to reach an agreement. Instead, the status quo will be maintained, and the countries will have to reconvene annually for the next 10 years to negotiate.
Implications
Withdrawing from the deal altogether is an option, but it’s uncertain whether Trump would have the authority to do so without congressional approval. Economists and trade experts are not expecting a withdrawal, given what’s at stake for the United States, including straining US relations with two of America’s top trading partners and potential chaos in the stock market.
Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.
