President Trump signs new trade deal with Canada and Mexico to replace NAFTA

Before the start of the G20 summit, President Donald Trump, Canadian Prime Minister Justin Trudeau, and outgoing Mexican President Enrique Peña Nieto officially signed a new trade agreement. The agreement will still need Congressional approval.

Here's what we know

In early October, the U.S., Canada, and Mexico finally agreed to a trilateral trade deal to replace the North American Free Trade Agreement, or NAFTA. While the Canadian government finally agreed to a deal in early October, it has objected to the Trump administration's protectionist steel and aluminum tariffs. These tariffs were not addressed by this trade deal.

Trump had repeatedly criticized NAFTA, which has governed North American trade since 1994, calling it “the worst trade deal in history.”

The deal still needs to be approved by Congress, but Trump said that he doesn't “expect to have much of a problem” getting that accomplished.

In a statement before the three world leaders sat down to sign the deal, Trump announced:

"We're gathered together this afternoon for a very historic occasion, the signing ceremony for a brand new trade deal: The United States-Mexico-Canada Agreement. So important. I'm honored to be here with president Enrique Peña Nieto, become a great friend of Mexico, and Prime Minister Justin Trudeau who has also become a great friend. This has been a battle, and battles sometimes make great friendships. So it's really terrific.

Trump called the deal “the largest, most significant modern and balanced trade agreement in history,” adding that it was “probably the largest trade deal ever made.”

While certainly a large trade deal, the USMCA is smaller than the Trans-Pacific Partnership was before Trump pulled out of it.

What about the agreement?

According to a news release from the White House, the USMCA would require “75 percent of auto content to be produced in North America.” It will also require “that 40-45% of a vehicle consist of content manufactured by North American workers making at least $16 per hour.”

This second requirement was put in place to prevent auto manufacturers from favoring Mexico, which allows companies to pay workers lower wages, over the United States.

Mexico has also agreed to labor reforms, while Canada agreed to increase market access for U.S. “dairy products, eggs, and poultry.”