While you were busy counting down the days to 2020 so we can escape this exhausting year, a new trade deal was reached yesterday.
Democrats in the House of Representatives announced they would support USMCA, the trade deal that was signed by the United States, Canada, and Mexico. It’s a big deal for President Donald Trump, who has wanted to rip up the existing trade deal, NAFTA, and start over for a long time.
But just because we’ve got a new trade deal with our neighbors doesn’t mean you’re going to see sudden changes when it comes time to make purchases.
What is it? How’s it different from NAFTA?
USMCA (United States Mexico Canada Agreement) is considered to be a “new” NAFTA because it updates the trade agreement that was signed for the U.S., Canada and Mexico way back in 1994. Remember 1994? Yeah. Simpler times.
NAFTA spelled out all the rules for trade among the three North American nations. Now, USMCA updates that agreement. In short, Speaker Nancy Pelosi said in a news conference that USMCA is a “victory for the American worker.” While USMCA is expected to create some new jobs by strengthening the rules of engagement for doing business across the borders, it also boosts intellectual property protections for creators and businesses, especially for digital products.
What’s the timeline on this thing?
We’re not really sure. All three countries have to ratify the agreement. The House of Representatives plans to vote next week to approve the deal, but Senate Majority Leader Mitch McConnell said the Senate won’t vote until Congress returns to session in January 2020. Continued attention to impeachment proceedings could delay that vote considerably.
But, considering this deal has been in the works for more than a year, a few weeks won’t make much difference to actual policy–it just changes the date everything goes into effect and can be enforced.
What does it mean for my wallet?
The final text of the agreement hasn’t been released, but there are two key areas where you may notice USMCA’s impact most obviously.
Higher wages for auto workers
Under USMCA, At least 30% of the work done to assemble a car or truck must be completed by workers making at least $16 per hour. By 2023, at least 40% of that work must be done by workers earning that much, according to the Washington Post.
This could mean cars get a bit more expensive, but it also means that we could see wage increases for more workers as a ripple effect of this rule.
Access to some generic drugs sooner
Right now, brand-name biologic prescription drugs—those not made from chemical compounds— are protected for 12 years before they can be produced by competitors as generics.
The original USMCA proposal reduced that to 10 years, but that rule has been removed from the final version. That means you’ll have a better chance of accessing cheaper generic versions of expensive prescriptions. Some popular biologics include those that treat diabetes, multiple sclerosis, rheumatoid arthritis, and some types of cancer.