A new trade deal between the U.S., Mexico and Canada would spur billions of dollars in new investment and launch thousands of new jobs in the North American automotive industry, according to a new study released on Thursday from the Office of the United States Trade Representative.
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Based on confidential data provided by the major carmakers with operations in the region, the sector would invest roughly $34 billion and create 76,000 jobs within five years of passage of the United States–Mexico–Canada Agreement.
"The actual impact, of course, may vary, depending on macroeconomic and other factors unrelated to the USMCA," the USTR wrote.
The report is a rosier outlook compared to another analysis released on Thursday by the U.S. International Trade Commission. The independent panel found that the deal would only increase automotive jobs by 28,000. It also said the agreement would raise U.S. gross domestic product by 0.35 percent.
Industry analysts and other experts previously forecasted that automotive provisions in the agreement – including the mandate that carmakers must increase the portion of an automobile made in North America from 62 percent to 75 percent – would result in more production in the U.S.
Ford Motor Co., Fiat Chrysler and Toyota, among others, have already announced new investments in the country.
The industry would not be required to adhere to the new requirements and businesses could opt to instead pay tariffs. Despite that, USTR says all automakers with operations in the region say they intend to meet the new thresholds.
“Automakers and parts manufacturers have indicated to USTR that the USMCA’s rules will not interfere with their plans to remain globally competitive while continuing to manufacture in the United States, nor will they significantly affect consumer vehicle prices,” the office said in its report.
|F||FORD MOTOR COMPANY||6.05||+0.07||+1.17%|
|GM||GENERAL MOTORS COMPANY||25.24||+0.28||+1.12%|
|FCAU||FIAT CHRYSLER AUTOMOBILES N.V.||9.95||+0.05||+0.51%|
The deal, intended to serve as an update to the North American Free Trade Agreement, has yet to receive Congressional approval.
But supporters are hoping it comes by August and are mounting an aggressive lobbying campaign to address concerns from Democrats, including over a provision to extend the protections drug companies receive in Canada and Mexico for new treatments.
USTR is already reportedly preparing a public relations campaign to push back against the ITC report, including the auto report and forthcoming studies on the impact of the new intellectual property protections.