Washington — A U.S. plastics industry trade group is giving cautious praise to the Aug. 27 announcement from the U.S. and Mexican governments that they've struck what they're calling a "preliminary agreement" to replace NAFTA.
While at this point the deal does not include Canada, the announcement could mark a significant step forward in attempts to revamp the trade deal, which President Donald Trump has routinely criticized.
Plastics trade groups from the United States, Canada and Mexico had called for modernizing, rather than scrapping, NAFTA. The Washington-based Plastics Industry Association called the announcement a positive step.
"While we look forward to Canada's involvement in finalizing the pact, today's announcement of a bilateral agreement between the U.S. and Mexico is a step in the right direction toward a truly modern agreement that can deliver for the workers, families and communities who depend on the nation's plastics industry," the association said.
"We are pleased to see progress toward the goal of building a strong, up-to-date trade agreement that's better suited to today's supply chain than the existing regime, and we applaud negotiators for their commitment to finding agreeable solutions that will benefit companies and workers in both countries," it said.
In a comment on Twitter, the chief economist for the plastics group, Perc Pineda, called the agreement a breakthrough that "should keep the negotiations between the U.S., Mexico and Canada moving. The plastics industries of [the] three NAFTA countries benefit from free trade."
The office of the U.S. Trade Representative, the lead negotiator for the Trump administration, described the deal as a "preliminary agreement in principle, subject to finalization and implementation," that will create "more balanced, reciprocal trade that supports high-paying jobs for Americans."
Specifically, USTR said the new pact includes substantive new provisions on country-of-origin rules for vehicle manufacturing, specifically requiring that 75 percent of auto content be made in the United States and Mexico and require 40-45 percent of auto content to be made by workers earning at least $16 an hour.
USTR said the deal will "help to preserve and reshore vehicle and parts production in the United States."
The U.S. government statement said the new agreement would have stronger rules of origin than NAFTA and the Trans-Pacific Partnership on autos, chemicals, steel-intensive products and optical fiber.
The statement also said the two countries have reached agreement on specific trade sectors, including chemicals, medical devices, information technology products and cosmetics.
In a news conference to announce the preliminary agreement, Trump said he hoped details would be completed by November. Outgoing Mexican President Enrique Pena Nieto joined the announcement by telephone.
Trump was noncommittal on whether Canada would be included in the agreement with Mexico, or whether he would push for a separate trade pact.
In a statement, the Washington-based National Association of Manufacturers also called the announcement a step in the right direction but stressed that it wanted to see Canada included in any final deal.
"Our hope — for the sake of our workers and a successful manufacturing industry here in America — is that the final agreement will include all three original signatories: the United States, Mexico and Canada," NAM said. "Because of the massive amount of movement of goods between the three countries and the integration of operations which make manufacturing in our country more competitive, it is imperative that a trilateral agreement be inked."
NAM said it was pleased that the early details of the agreement with Mexico seem to have more workable content requirements than earlier proposals, and that it has investment protections for some industries, stronger intellectual property protections than previous deals and updated provisions for a digital economy. It also said it was pleased the agreement does not seem to include an automatic five-year sunset provision.
