The deal framework does NOT necessarily improve Mexico's position at the expense of the US because 40-45% of the now 75% local (US and Mexican) content requirement must made by workers being paid at least $16 per hour. The deal squeezes out Chinese auto parts and other Chinese supplies to the benefit of both US and Mexican workers. The exports China gives up will be replaced by content produced by Mexican and U.S. workers. This deal also steps on Mr. Trudeau’s nutsack - his little corner just got a lot smaller. I personally think it’s kinda brilliant.
Right - so the calculus is that in the Southern or Mid-Western ‘right to work’ law States a component manufacturer could certainly start assembly workers out at $16/hour. And the new corporate tax laws make hiring American workers and being able to expense plant and material (versus a protracted depreciation schedule) investment for the next five years attractive versus paying Mexicans $16 per hour.
Trudeau just rushed his Trade Minister down to Washington this afternoon. Third man out, weaker negotiating position now that Mexico and US have a fair bilateral deal that takes the auto sector away from Canada. Trudeau just lost any leverage he had left - he was too cute being the progressive light bringer and ignored some very basic negotiating principles. https://www.reuters.com/article/us-...n-nafta-deal-possible-this-week-idUSKCN1LD1T4
https://www.cbc.ca/news/politics/tasker-freeland-nafta-talks-trump-1.4801706 Mexico's ambassador to Canada said his country is prepared to go it alone with the Americans if Canada and the U.S. are not able to resolve some lingering bilateral issues, namely the extension of intellectual property (IP) rights and a dispute settlement mechanism.
As per usual, there are Americans like you that underestimate what Canada has going on and overstate the influence of the US on the planet. Toronto is the fastest growing IT center in North America. Trump is driving some of that business to Canada. When I say Canadians don't care much about all this, I'm speaking the truth. It's all noise at this point. The minute the "Canadian auto sector" gets dinged is the minute that the big 3 US auto makers have a serious problem.