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People and in canada. the latest goes to the eu japan economic partnership that accounts for one third of the world economy. it's a brand new trade deal that leaves the u.s. out in the cold. here's the new deal that's been agreed to, tariffs on agricultural products traded between the united states and mexico will remain at zero. the new requirements focus on car parts and production. 75% of auto content must be made in the united states and mexico. that's up from the original nafta requirement of 62.5%. 40 he 40% to 45% of auto content must be made by workers earning at least $16 an hour. aut...

That are because of this trade dispute that we're in with mexico. the agreement includes new requirements on car parts and production. under this deal, 75% of a car's parts must be made in the united states and mexico. that's up from top original nafta requirement of 62.5%. now, add to that that 40% to 45% of the parts of the cars must be made by workers earning at least $16 an hour. not an average of $16 an hour, but they have to have a minimum of $16 an hour. the u.s. trade representative says the goal is to level the playing field and stop incentivizing low wages, which is typically a reaso...

Name nafta. here he was. >> we are going to call it the united states/mexico trade treatment. we'll get rid of the name nafta. has a bad connotation. i will be terminating the existing deal and going into this deal. we will start negotiating with canada relatively soon. they want to start -- they want to negotiate very badly. but one way or the other we will have a deal with canada. >> the president has long called the '94 nafta deal between the u.s. mexico and canada a ripoff and quote the worst trade pact in history. let's discuss with paula newton and melody haum. what's in the deal? is it ...

Agreement on trade issues and rescind these tariffs. by the way, it is not just motorcycles. products including whiskey, and typically kentucky whiskey, bourbon, juice, boats, and playing cards have been hit with this tariff hammer. with me is my old friend from cnbc, phil lebeau. he covers the auto industry, including the motorcycle industry. phil, you're an expert on this. before there was nafta, there was a free trade agreement with canada. >> right. >> before there was a free trade agreement, this was the auto pact with canada. all of this is based on the success of an integrated auto manu...

That, my friends, gives us a trade surplus of $8.4 billion. >> boom. >> canada says it will impose retaliatory tariffs on u.s. goods july 1st. it remains to be seen what they will be. no doubt, u.s. exporters will feel the pain. the u.s. trade rep says the canada was the united states' largest goods export market last year. >> all right. thank you for that. cnbc is joining us. ron, here's the probm. you rember back in the day, before nafta, back in the day before the free trade agreement, you and i are old enough to remember the auto pact. >> yes. >> that was the deal that cars would be assemb...