Canada, US and Mexico reach new trade deal — Revamped NAFTA

Andrew Cummings
October 6, 2018

Not too long ago, Trump was flinging insults at Trudeau over Twitter, taunting him as "very dishonest & weak" and "meek and mild" in June as he left a G7 summit in Canada that the prime minister had hosted.

Another element of the deal will exempt Mexican and Canadian cars from any future USA automotive tariffs up to certain import quotas.

Regarding customs clearances, the Institute of Scrap Recycling Industries (ISRI), Washington, says it is hopeful the USMCA's more detailed guidelines for the three governments to cooperate will allow for improved border-crossings, including information sharing, law enforcement collaboration, procedures for adjudicating disputes. Canada avoided auto tariffs and maintained access to the all-important American market.

Trump has applied this same template to the North American Free Trade Agreement (NAFTA), which he spent years lambasting as "the worst trade deal ever approved". In March, he began imposing taxes on steel and aluminum imports.

"We've done this in 14 months", said Lighthizer during a press conference about the agreement. "We have survived it".

Passage of the deal by the US Congress is not expected until the spring of 2019, after November elections could shift control of the House of Representatives to Democrats from Republicans.

President Donald Trump celebrated a trade deal with Canada and Mexico to replace NAFTA as a "historic" win that vindicated his strategy of threatening tariffs on trade partners.

"We didn't ask to reopen NAFTA".

"We were always on the defensive".

That person was none other than U.S. President Donald Trump.


"The Americans had started off demanding 50 per cent USA domestic content in cars and vehicle parts".

"Having Canada as a trading partner and a party to this agreement is critical for North American energy security and US consumers", Sommers said.

The newly christened U.S. -Mexico-Canada Trade Agreement, or USMCA, provides increased access to Canada's dairy market for U.S. producers.

But there is a widely shared belief that Canada made concessions and the US did not.

Also, American financial services will be allowed to compete with local financial services in Canada and Mexico, getting most-favored nation treatment. "At that point, we saw everything that happened on Wednesday".

Robert Bothwell, a professor at the University of Toronto, also said the US just reduced their initial demands. He said the deal now faces scrutiny by lawmakers. "People will accept it with resignation rather than joy. Our economic partnership has been reaffirmed, but trust can't be rebuilt with the stroke of a pen", Paris tweeted.

Hours before the midnight deadline, the two countries agreed to a renewed trilateral agreement between the United States, Mexico, and Canada, which is now dubbed "USMCA" - the US-Mexico-Canada Agreement. In the white paper, China blamed the United States for causing the trade war and defended its own trade practices.

"Unilateralism and trade protectionism are rising, and relying heavily on foreign countries will not only erode the foundation of [Chinese] development but also endanger national security", the opinion piece said. One of those lines was the way Canada ran its dairy sector.

"I don't want to celebrate this deal until we see the full details, but I'm encouraged by President Trump's commitment to dairy farmers".

Canada, the United States' No. 2 trading partner, was left out when the USA and Mexico reached an agreement last month to revamp the Nafta. "Canada is a trading nation".


"It's freakish", Charest, the former Quebec premier, said.

In regards to China, Trump said the US could "go $267 billion more" when it comes to tariffs on products.

"It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the almost half billion people who call North America home". "Japan and Europe, as well as the rest of the world, should be on notice that this may be the price of admission to a trade deal with the U.S". In 2016, Oklahoma did $1.394 billion worth of export business with Canada and about $537 million with Mexico. "Canadians expected that an agreement on NAFTA would result in the US lifting the bogus national-security tariffs on Canadian steel and aluminum". The U.S. wanted a higher figure.

A timeline of steps the USA must take before implementation is available online here.

"He's a professional, I'm a professional", Trump said.

There is still a 25 per cent tariff on Canadian steel, and 10 per cent tariff on Canadian aluminum which could have a major effect on the automotive industry. "Provisions in this new agreement raise [Intellectual Property] protections so that pre-existing IP owners, who are predominantly American, can entrench and extend their monopoly rights and rents for decades to come", he said in a statement. "As a Canadian, the whole approach that has been taken (by the U.S.) has been offensive and I don't think Canadians will forget it".

Negotiating without a credible threat of trade sanctions, Stumo argued, "leaves no incentive for other countries to agree to anything new".

"It has been shocking and disappointing and upsetting". "It has been traumatic. I do get exhausted of seeing the country get ripped off".

But as he was taking a victory lap, conservative columnist Max Boot laid out why Trump's accomplishment was essentially meaningless, in a scathing editorial titled, "President Trump creates crises, then claims credit for solving them".

Bothwell, the University of Toronto professor, warned of lingering damage to relations. Politically, this could ultimately put Democrats in a very tight spot, particularly if blue collar voters who pulled the lever for Trump in 2016 like what they're hearing from this new deal.


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