White House: New NAFTA would give $60B boost to auto sector

White House: New NAFTA would give $60B boost to auto sector
© Getty Images

President TrumpDonald John TrumpTrump says 'Failing New York Times' should be held 'fully accountable' over Russia report Trump says 'Failing New York Times' should be held 'fully accountable' over Russia report Trump tweets ICE will begin removing 'millions' of undocumented migrants MORE’s proposed North American trade pact would spur more than $60 billion in investments and sales for the U.S. auto industry to create more than 70,000 new jobs, according to White House estimates released Thursday.

The Office of the U.S. Trade Representative (USTR) projected a significant boost for U.S. automakers and parts producers in an economic analysis of the U.S.-Mexico-Canada Trade Agreement (USCMA) published Thursday.

The White House trade office projected the USMCA to spur $34 billion in investments in U.S. auto plants, $23 billion in American auto parts sales and create 76,000 new industry jobs over the course of five years.

The employment gains would include roughly 22,800 automotive assembly jobs, 8,000 additional advanced battery supplier jobs, and 45,600 additional automotive supplier jobs, according to USTR estimates.

USTR said it based its estimates on “information provided by automakers with assembly operations in North America” and companies’ previously announced plans to bolster production in the U.S.

The deal, which is pending legislative approval in the U.S, Canada and Mexico, would replace the North American Free Trade Agreement (NAFTA), which Trump pledged to revise or rip-up during his 2016 presidential campaign.

Trump has promised to restore the U.S auto sector through renegotiating trade deals with Mexico, Canada, Japan and the European Union in an effort to reverse decades of outsourcing.

USMCA would impose requirements that cars and trucks imported from Mexico and Canada be manufactured with 75 percent components from the three countries to avoid tariffs.

The deal would also mandate that a significant amount of automobile work be done at a pay rate of $16 per hour,  a measure meant to force Mexican companies to raise wages toward U.S. levels.

Trump, Canadian Prime Minister Justin TrudeauJustin Pierre James TrudeauOn The Money: Democrats move funding bills as budget caps deal remains elusive | Companies line up to weigh in on 0B China tariffs | Trudeau to talk trade with Pelosi, McConnell On The Money: Democrats move funding bills as budget caps deal remains elusive | Companies line up to weigh in on 0B China tariffs | Trudeau to talk trade with Pelosi, McConnell Trudeau plans to meet with Pelosi, McConnell to talk trade: report MORE and former Mexican President Enrique Peña Nieto agreed to the USMCA terms in October after lengthy negotiations.

But the deal will not be in effect until the U.S., Canadian and Mexican legislatures approve it, and the USMCA faces significant hurdles in Congress.

Democratic lawmakers have said that USMCA’s labor protections and environmental standards are too weak to earn their support. Liberals have threatened to vote against the deal without changes, but Republicans and White House officials say its too late to adjust the terms.

Trump has threatened to pull the U.S. from NAFTA if Democrats do not approve the USMCA, which could pose significant damage to country’s economy. Business groups have warned Trump against killing NAFTA, and former a bipartisan coalition with several former lawmakers to rally lawmakers behind USMCA.