U.S. President Donald Trump had previously threatened to quit the NAFTA if he was unable to get a better agreement. /VCG Photo
U.S. President Donald Trump on Wednesday signed a revised North American Free Trade Agreement into law.
Trump said that the new one will keep jobs, growth and wealth in America. His signing of the agreement is a fulfilment of a 2016 campaign promise to rewrite the trade deal.
Trump and other detractors of the NAFTA, which came into force in 1994, argued that it pushed American factories to relocate to Mexico due to the country’s low-wage workforce.
The House of Representatives had passed it by an overwhelming 385-41 vote in December and the Senate followed with an 89-10 vote earlier in January.
In May 2017, a US trade representative said Trump intended to begin negotiations with Canada and Mexico over the NAFTA to support higher-paying jobs in the United States and grow the U.S. economy by improving its opportunities to trade with Canada and Mexico.
"This is a cutting-edge, state-of-the-art agreement that protects, defends, and serves the great people of our country," Trump said in an outdoor signing ceremony at the White House, where the invitation list included more than 70 Republican members of Congress but no Democratic legislators. "Together we are building a glorious future that is raised, grown, built and made right here in the glorious U.S.A," Trump said.
One of the provisions of the agreement says that carmakers must get 75% of their production content from within North America to qualify for duty-free benefits in the agreement.
Additionally, at least 40% of vehicles would also have to come from areas where workers earn at least $16 an hour, which is primarily the United States and Canada.
Trump had previously threatened to quit the NAFTA if he was unable to get a better agreement.
Canada and Mexico are the two largest markets for American exports. The original deal saw a spike in trade among the three North American nations following the removal of trade barriers.
Critics, however, argue that the agreement fails to address global warming while others say it will make cars and other products more expensive for consumers.