Canada | New NAFTA Deal | Trump Tariffs

Andrew Cummings
October 2, 2018

"Without tariffs we wouldn't be talking about a deal", Mr Trump said. But by tomorrow, I would suspect they will change their tune, but that's okay because people know how good it is.

Trump also refused to be pinned down on whether he intends to ease Section 232 tariffs on Canadian exports of steel and aluminum, saying at once that the tariffs remain in place, but they won't be necessary as long as Canada and Mexico honour the terms of the new agreement. "So if you comply with the rules of origin, there's no way you are subject to 232 tariffs", Ujczo said.

A senior administration official, who asked not to be named, tells the Post that the deal includes better protection for labor rights, the environment and intellectual property than trade deals made under the Obama administration.

Canada is back in a revamped North American free trade deal with the United States and Mexico after weeks of bitter, high-pressure negotiations that brushed up against a midnight deadline. Trump threatened to go ahead with a bilateral deal with Mexico, but Mexican officials strongly advocated for Canada's inclusion.

Canada agreed to a cap on auto exports to the US - of about 40 per cent above current production levels - that would be free of any auto tariffs Trump might impose, the source said. Mexico wants a deal signed before December 1, when the new Mexican administration takes over and the Trump administration wants the current, Republican-controlled Congress to vote on the deal quickly, given a potential change in control after the November midterm elections. Any dairy imports above the 3.6-per cent threshold still face Canada's punishing tariffs, which were a sticking point in negotiations with the U.S.

U.S President Donald Trump took to Twitter early Monday to praise what he called an "historic" deal that came just before USA and Mexican trade authorities were set to publish their own trade agreement without Canada as a signatory.


Administration officials have insisted that they needed to release the text of the new deal - with both countries or only Mexico - by September 30. He says that while he's optimistic the United States-Mexico-Canada Agreement will create opportunities, he's anxious about the impact on Ontario's agriculture sector.

She said the insertion of a minimum wage level for auto parts workers could lead to similar clauses in other trade deals: "If it turns out to be very politically popular in the United States it could [be used again]".

More than two-thirds of Canadian exports go to the United States, equivalent to 20 percent of its Gross Domestic Product, while Canada is the largest export market for the United States. Although Canadian sources said its government was prepared to offer compensation, dairy farmers reacted angrily.

It said the measures will have "a dramatic impact not only for dairy farmers but for the whole sector".

Mr. Trump plans to submit the deal, known by the acronym USMCA, later this year, but it likely won't see final action until next year, after a new Congress is seated.

The symbol indicates 100 per cent Canadian dairy.


"This is a truly extraordinary agreement for the US, Canada and Mexico".

"The Americans had started off demanding 50 per cent USA domestic content in cars and auto parts". Dairy Farmers objected to this, too, but the once-obscure dairy classification had become a lightning rod of discontent for Trump. But Trump and other critics said it encouraged manufacturers to move south of the border to take advantage of low-wage Mexican wages. USA administration officials, speaking on the condition of anonymity, said Sunday night that this was a win for farmers in Wisconsin, New York and elsewhere.

President Trump and Canadian Prime Minister Justin Trudeau shake hands during a meeting in the Oval Office in February. "We never believed that it would be easy, and it wasn't, but today is a good day for Canada".

With a Nafta deal on the table - and a bullet dodged for the auto sector - the clock is ticking for the next key trade talks for Canada's steel and aluminum industries.

"We were able to make sure that the dispute mechanism within the original NAFTA agreement is preserved so that we can have a fair adjudication process in our disputes with the United States", he told reporters in Ottawa.


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