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Washington (CNN) - After reaching an agreement on the final version of the United States-Mexico-Canada Treaty (known as T-MEC or USMCA), President Donald Trump tweeted that “he will be the best and most important trade agreement ever made by the United States, "and called its predecessor, the North American Free Trade Agreement (NAFTA or NAFTA)," the worst trade agreement in our country. "
The president of the House of Representatives, Nancy Pelosi, echoed that opinion and said in her announcement that "there is no doubt, of course, that this trade agreement is much better than NAFTA."
But the two agreements are much more similar than different, and the impact of the renegotiated may not be so great. In April, the United States International Trade Commission, a federal government agency, discovered that the initial version of the T-MEC would create 176,000 jobs after six years and increase GDP by 0.35%, an impact that the agency He described as "moderate." (For the sake of comparison: The United States added 266,000 new jobs in November alone.) The final full version has not yet been released publicly.
(GUILLERMO ARIAS / AFP via Getty Images)
Here are five key differences between the two agreements:
Boosting car manufacturing
The T-MEC requires that 75% of the parts of a vehicle be manufactured in one of the three countries, compared to the current 62.5% rule, to remain free of tariffs when moving between the three signatory countries.
It also requires that more vehicle parts be manufactured by workers who earn at least $ 16 per hour, which can boost manufacturing in the United States, where wages are higher than in Mexico.
The International Trade Commission report found that these changes would add 28,000 jobs to the industry for six years, while leading to a small increase in the price of vehicles paid by consumers.
But the US Automotive Policy Council, which represents General Motors, Ford and Fiat-Chrysler, argued that the commission's report underestimated the long-term investments that American automakers will make due to the T-MEC.
A Trump administration report was more positive, projecting that the agreement would create 76,000 auto jobs in five years. That would mean a more than 7% increase in employment over the current 990,000 American auto workers.
On Tuesday, the commercial group said the three major automakers were "pleased" that the T-MEC was moving forward.
“The T-MEC allows the US automotive industry. UU. remain competitive globally by ensuring that vehicles and auto parts can move freely across country borders, ”said Matt Blunt, president of the United States Automotive Policy Council, in a statement
But car plants are capital intensive and it takes a long time to move production. Industry analysts have said that some automakers may choose to pay the tariff, at least initially, instead of moving plants or extending shifts.
A GM spokesman said Tuesday that the company had already made numerous changes in anticipation of the stricter standards set by the T-MEC, including the plan to bring the production of a new Chevrolet electric vehicle back to the United States, as well as Build a new GM / LG battery plant near Lordstown, Ohio.
Labor laws were strengthened
Manufacturing workers blamed NAFTA for sending jobs to Mexico, where wages are lower, and for Democrats it was a priority for T-MEC to strengthen the application of labor standards, leaving a more level playing field for workers Americans
Lawmakers were able to include some changes in the language of application before reaching an agreement on Tuesday with the Trump administration, and the agreement now has the backing of the AFL-CIO, the largest federation of unions in the United States.
"For the first time, there will really be enforceable labor standards, including a process that allows inspections of factories and facilities that do not meet their obligations," AFL-CIO President Richard Trumka said in a statement.
The agreement reached by the Democrats establishes an inter-institutional committee that will oversee the implementation of Mexico's labor reform and compliance with labor obligations and a set of benchmarks for Mexico to comply with the implementation of the reforms.
Milk producers gain greater market access
The original NAFTA eliminated tariffs on most agricultural products traded between the three countries. Canada and Mexico are already the two largest export markets for American farmers and ranchers.
The T-MEC will keep those tariffs at zero, while opening the Canadian market to US dairy products, poultry and eggs. In return, the United States will allow more dairy products, peanuts and Canadian peanut products, as well as a limited amount of sugar, to cross the border.
NAFTA update for the digital era
The T-MEC includes new benefits for the technology sector, in a chapter on digital commerce that was not part of the original NAFTA. The new provisions are not expected to directly create new jobs, but they could provide a boost to American businesses in other ways.
For example, the new trade agreement prohibits Canada and Mexico from requiring US companies to store their data on servers in the country. It also ensures that US companies cannot be sued in Canada and Mexico for much of the content that appears on their platforms, a legal protection that Pelosi had pressed to exclude from the T-MEC in the midst of an ongoing debate in the United States over whether Technology companies still deserve that shield of responsibility under national law.
Congress maintains control over biological medicines
The Democrats negotiated the elimination of what would have been new and controversial protections for biological medicines. They argue that it would have prevented Congress from being able to legislate on drug price issues.
The provision that was removed from the trade agreement would have required the three countries to provide at least 10 years of exclusivity for biological products, which are complex and expensive to produce. Currently, the United States offers 12 years of exclusivity, while Canada offers eight years and Mexico five years.
Republicans have long supported the inclusion of exclusivity provisions for pharmaceutical companies in trade agreements, and the pharmaceutical industry quickly opposed the disposal of the provision.
"Eliminating the supply of biological products in the T-MEC eliminates vital protections for innovators and does nothing to help American patients pay for their medications or access future treatments and cures," said Stephen Ubl, executive director of PhRMA , a commercial group.
"The only winners today are foreign governments that want to steal American intellectual property and take advantage of the United States' global leadership in biopharmaceutical research and development."
Vanessa Yurkevich and Holmes Lybrand of CNN contributed to this story.
T-MEC
