Question

Discuss the changes to U.S. trade agreements under the current administration and in the current political environment.

Answer 1

The changes that are observed under current administration are some of the remarkable changes in NAFTA. Some of them are mentioned below:

• At least 75% of car components must be manufactured in US, Canada or Mexico. Previously it was 62.5%. It will create more jobs for US workers but it will also increase cars sold in America.
• Canada must open its dairy market and eliminate its complex pricing scheme
• US producers will have access to 3.6% of Canada’s dairy market.
• Before crossing US border Mexican trucks must meet US safety standards and it should allow Mexicans to form unions
• The US drug companies should be allowed for 10 years to sell products in Canada before facing generic competition.
• NAFTA has allowed business of all size to work effectively by reduction or elimination of tariffs that has resulted in increase in living standards, higher GDP and rise of knowledge economy.

Besides this in the current political scenario there is a trade war between US and china, raising a tariff on Chinese products worth $200 billion. It was ignited by the changes made in 7 chapters of draft trade deal, where China has deleted its commitment to change laws to resolve grievances from US counterpart.