The Trump card on NAFTA to Congress: Vote yes on USMCA or U.S. pulls out of NAFTA                   By Kelly- Feb 7, 2019

By Robert Romano

At the Feb. 5 State of the Union Address President Donald Trump once again appealed to both chambers of Congress to adopt the new United States-Mexico-Canada Agreement (USMCA) reciprocal trade deal that will replace the North American Free Trade Agreement (NAFTA). 

“Our new U.S.-Mexico-Canada Agreement — or USMCA — will replace NAFTA and deliver for American workers: bringing back our manufacturing jobs, expanding American agriculture, protecting intellectual property, and ensuring that more cars are proudly stamped with four beautiful words: made in the USA,” Trump said at the speech. 

The agreement itself appears to improve on NAFTA from the perspective of U.S. producers and American workers, as the U.S. achieved significant concessions on country of origin requirements, labor, agriculture, currency, intellectual property, financial services and textiles (see below). 

But the biggest incentive of all to pass it may be that President Trump has threatened to leave NAFTA altogether if Congress does not pass the USMCA replacement. Under fast track rules, a vote on the new trade agreement is mandatory. 

On Dec. 1, 2018, Trump told reporters, “I’ll be terminating it within a relatively short period of time. We get rid of NAFTA. It’s been a disaster for the United States… And so Congress will have a choice of the USMCA or pre-NAFTA, which worked very well.”

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