The completion of the U.S.–Mexico-Canada Agreement (USMCA) alleviates the concerns of businesses and investors who for months worried about our trade relationships with Canada and Mexico. Investors seem generally relieved that important components of the North American Free Trade Agreement (NAFTA) had survived President Trump’s hardball strategy to reshape global commerce. Trump’s supporters argue that this agreement marked the first major validation of Trump’s take-it-or-leave-it negotiating tactics.

Trump’s critics, however, point out that the new deal shows the limits to Trump’s “America First” agenda. Because he encountered resistance from Congress, business, his own advisers and U.S. trading partners, USMCA made few meaningful changes to Nafta.

Automobiles

The trade deal allows automakers and other multinational companies to maintain the complex and costly supply chains that have been established in North America since NAFTA was completed in 1994. USMCA spares automakers from costly tariffs on cars and parts imported from Canada and Mexico.

The tentative deal requires that at least 75 percent of a car’s value be produced from parts and materials built in the region. The new deal also will shift some production away from Mexico and toward the U.S. by stipulating that workers get at least $16 an hour on about 45 percent of cars.

Agriculture

The new agreement preserved the annual trade of tens of billions in farm goods among the U.S., Canada and Mexico. Canada agreed to drop its quota and pricing system, which limited imports of certain dairy products from America. The U.S. exported $637 million worth of milk, cheese and other dairy products to Canada in 2017, according to the U.S. Department of Agriculture.

Steel and aluminum

The agreement temporarily leaves in place the administration’s tariffs on steel and aluminum. U.S. trade negotiators face pressure from domestic steel producers to keep the tariff that has given them leverage to raise prices, improve margins and expand production at domestic plants.

Manufacturing

U.S. manufacturers benefit because it precludes disruption for companies that have built supply chains that span the continent.

Digital-age update

The new agreement addresses issues that have arisen since 1994. It prohibits duties on digital music, books, software and video games that are distributed electronically. It strengthens intellectual property protections, including patents for biotech and financial services.

Exchange-rate rules

The new pact would include for the first time enforceable rules to deter countries from weakening their exchange rates to gain trade advantages. American manufacturers hope the rules would be included in future deals with Asian countries.

The new agreement with America’s second- and third-largest trading partners avoided a major disruption in hemispheric supply chains. The U.S. now will be in a better position to confront China.

The administration could have a difficult time convincing Democrats in Congress to approve it, which would be crucial if they come to control the House and Senate.

But I think the USMCA benefits American dairy farmers and automakers and provides new e-commerce and intellectual property protections.

It should be approved on a bipartisan basis.

Originally published in the Sarasota Herald-Tribune