Local expert says ‘new NAFTA’ trade deal good for metro’s economy

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KANSAS CITY, Mo. — One local expert says, for local farmers and auto workers, there’s a lot to like in the so-called “new NAFTA.”

“It’s not bad news,” said Raj Bhala with the University of Kansas. “It’s not bad news at all.”

President Trump announced the new trade agreement, called the United States, Mexico, Canada Agreement (USMCA), late Sunday night.

For workers at either the Ford Motor Company plant in Claycomo or the General Motors plant in KCK, the new trade pact can be seen as a commitment to American manufacturing — or at least North American manufacturing.

One of the goals of USMCA is to increase the number of car and truck parts made in North America. The new deal requires 75 percent of the value of a vehicle to be produced in the United States or Mexico, up from the NAFTA threshold of 62.5 percent.

“The 12.5 percent differential is where you could expect auto companies to source their parts not from China and not from Thailand and not from Indonesia,” Bhala said. “Instead, those parts will come from within North America.”

A statement from Ford Motor Company saluted the commitment to American manufacturing.

“The benefits of scale and global reach will help to drive volume and support manufacturing jobs,” Joe Hinrichs, with Ford Motor Company, said in a statement.

From Washington D.C., Kansas Sen. Jerry Moran praised the new trade pact.

“Canada and Mexico are two export markets, as a result of NAFTA, that accounts for approximately 39 percent of all total exports from Kansas,” Moran said.

Ronnie Russell with the American Soybean Association also believes the USMCA will help local farmers who are already struggling with an ongoing trade war with China.

“This is a good thing,” Russell said. “It’s going to be good for Missouri and the middle part of our growing regions in our country. Because a lot of our products here in Missouri, go to Mexico. So it’s a really, really good deal.”

Bhala believes securing traditional export partners, during what’s been a trying year, is welcome news for the local agriculture industry.

“You need new markets,” Bhala said. “We are starting to look at new markets, India, Guatemala. But you also need to preserve traditional key markets, and that’s Canada and Mexico.”

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