The United States And Mexico Reach A Preliminary Deal On NAFTA But Talks With Canada Remain Uncertain -

On August 27, 2018, the United States and Mexico announced that they had reached a bilateral agreement that would replace the North American Free Trade Agreement (“NAFTA”). Although the agreement’s exact language is still subject to negotiation, the new agreement will reportedly:

..Establish new rules of origin for passenger vehicles, light trucks, and auto parts. Under the agreement, to be eligible for a preferential 2.5 percent tariff, a vehicle would need to consist of 75 percent U.S. or Mexican origin products, which represents an increase from the 50 to 62.5 percent levels now required under NAFTA. Additionally, to be eligible for the preferential tariff, 40 percent of the value of a car and 45 percent of the value of a light truck would need to be manufactured by workers making $ 16 an hour...