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The agreement will replace the1994 North American Free Trade Agreement (NAFTA), which President Trump argued was unfair toward the United States, calling it "the worst trade deal in history" because it added to the country's deficit and moved manufacturing jobs out of the country.
"We applaud the governments of the United States, Mexico and Canada for working together to approve and implement an agreement that simplifies trade for the highly integrated North American supply chains," FedEx COO Raj Subramaniam said in a statement.
He added that "modernizing and expanding global trade through free trade agreements like USMCA breaks down trade barriers, creates new job opportunities and helps our customers reach new markets."
FedEx said the duty and tax exemption threshold agreed upon by all three countries will increase shipments and potentially decrease shipping costs; the simplified clearance value will limit necessary documentation, which will lower costs and increase efficiency; and quicker clearance will strengthen customer satisfaction, according to a press release.
The agreement aims to have more cars produced in the United States, where workers earn an average of at least $16 an hour. It also secured changes that require Mexico to change its laws to make it easier for workers to form independent unions, which should improve worker conditions and wages and reduce the incentive for U.S. companies to relocate their plants.
The USMCA will likely have a positive impact on factory-heavy, swing states like Michigan, Pennsylvania and Wisconsin, where the president campaigned on modernizing trade deals in 2016.
The International Trade Commission projected in April that the trade agreement would boost the economy by $68 billion and add 176,000 jobs six years after taking effect. That’s barely a ripple in a $21 trillion-a-year economy, but many senators noted that key industries in their states supported the agreement.
The Associated Press contributed to this report.