The U.S. Senate Thursday cleared an amendment to the 26-year-old North American Free Trade Agreement that includes more durable rules on labor and automotive content; however, it leaves $1.2 trillion in annual U.S.-Mexico-Canada trade flows mostly unchanged.
The legislation to implement the U.S.-Mexico-Canada Agreement passed on an 89-10 bipartisan vote, sending the measure to President Trump for him to sealed into law.
The Democratic-managed U.S. House of Representatives passed the legislation on December 19 after hammering out modifications to ensure better enforcement of labor rights and tighter environmental guidelines during months of often hostile discussions with the Trump administration.
The Senate vote came a day after Trump signed a long-awaited Phase 1 trade agreement with China, and shortly before the Senate formally started the impeachment trial of Trump on charges that he violated his power.
The U.S. S&P 500 stock index hit the 3,300 mark Thursday for the first time, floated by the two trade agreements, solid retail sales and upbeat Morgan Stanley profits.
U.S. Treasury Secretary Steven Mnuchin stated Trump’s efforts to rebalance U.S.lrelations with its principal trading aides were bearing fruit, and boosting U.S. financial growth.
On Wednesday, Mnuchin said an interim trade deal with China and the passage of USMCA would boost the growth of the U.S. gross domestic product by 50 to 75 basis points.
Mexican Prez Andres Manuel Lopez Obrador Thursday called the deal’s clearance good news for the Mexican economy and predicted it would jump-start new investments.
Canada still needs to sign the deal before it can take effect and replace NAFTA. It was sealed by the leaders of the U.S., Mexico, and Canada in September 2018.