The leaders of the United States, Mexico and Canada on Friday signed a revamped North American Free Trade Agreement, a move that is likely to affect Japanese and other foreign automakers operating in Mexico and Canada.
The accord — called the United States-Mexico-Canada Agreement (USMCA) — requires 75 percent of auto content to be made in the NAFTA region, up from the current level of 62.5 percent, a move that would make it difficult for automakers to use parts produced outside the three countries.
It also obliges 40 to 45 percent of auto content to be made by workers earning at least $16 per hour, a wage level that would reduce incentives for U.S. and foreign carmakers to move jobs to Mexico, a country with low-wage manufacturing labor.