Will: 'Surprisingly Pleased' With New Trade Deal
INDIANAPOLIS - University of Indianapolis Associate Professor of Finance Matt Will thinks Indiana businesses have a lot to be happy about with the newly-negotiated United States-Mexico-Canada Agreement. He says the deal, announced by President Donald Trump late Sunday, puts the three countries on a more level playing field when it comes to labor and environmental standards for auto parts, meaning less incentive for U.S. companies to move their manufacturing across the border. All three governments must still approve the proposed agreement.
Will says the deal is mostly tariff-free, creating a free trade zone for the most part among the three countries. The deal does include a lot of protections for the Canadian dairy industry, but Will calls that a "small price to pay," since refusing those would likely have led Canada to exit the deal. Other agricultural tariffs, he says, are substantially eliminated.
The deal focuses a lot on the auto industry, with some minimum wage requirements for auto part makers in the three countries, in hopes that will discourage U.S. companies from moving their manufacturing to Mexico, where labor is often cheaper. It also, Will says, requires all three countries to abide by U.S. environmental standards in the industry, eliminating another potential advantage of bringing in parts from other countries.
Will says he's not concerned about negative effects on Indiana's auto industry. Since the state is almost at full employment and many manufacturers are dealing with a labor shortage, so Mexico would get "overflow" production.
In March, Governor Eric Holcomb completed a three-day trade mission to Canada, focusing on economic development, research and innovation and maritime connections.