Bleakley on the USMCA deal

January 30, 2020

The deal could prompt new investment by auto companiesUncertainty over the agreement created a lot of anxiety within the industry, said Hoyt Bleakley, a professor of economics at the University of Michigan. “Investors don’t just get anxious, they stop investing too,” Bleakley said. “The most important benefit of having the treaty is resolving the uncertainty about what would happen if NAFTA had been dumped and not replaced.”But auto industry investors usually consider investments more than six years in advance, when the USMCA will be up for review. If Canada, the U.S. or Mexico dont agree to continue the deal, it would expire 16 years later.”This simply means a considerable degree of uncertainty will remain,” Whitman said. “That’s going to be hard to deal with” for companies seeking investment.

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