RALEIGH, N.C. - Economists and agriculture advocates on Wednesday said a replacement for NAFTA could help North Carolina's automotive and agricultural industries.
- Economists say North Carolina's auto parts sector might benefit
- Consumers might have to pay slightly more for new cars
- The N.C. Farm Bureau said pork farmers could benefit from lower export duties
House Speaker Nancy Pelosi on Tuesday announced House Democrats had reached a deal with the Trump Administration on the United States-Mexico-Canada Agreement, a trade pact meant to replace the North American Free Trade Agreement that has been in effect since 1993. According to the Office of the United States Trade Representative, the USMCA will require at least 75 percent of the parts in cars to be made in North America to avoid a tariff. Additionally, at least 40 to 45 percent of automotive content would have to be made by workers who are paid at least $16 per hour, a rate that effectively forces some production to move back to the United States and Canada.
N.C. State economist Prof. Michael Walden said those automotive provisions could boost North Carolina's auto parts industry. Although there are no assembly lines in the state, many North Carolina-based companies provide components that go into cars on the road. He said increased business could lead to more jobs in the auto parts industry.
Since some manufacturing would be moved to higher-paid workers in the United States and Canada, Walden said the resulting higher labor costs might get passed along to the consumer.
“I don't think that most consumers will see a big difference, but I do think the auto industry in North Carolina, the parts, will see some pluses,” he said.
The agreement also would change the export duties for U.S. agricultural products including dairy and pork. N.C. Farm Bureau President Shawn Harding said pork farmers in particular might benefit because Mexico and Canada are larger markets for North Carolina pork than China.