February 19, 2019

Trade deal returns USA to 'manufacturing powerhouse'

06 October 2018, 03:40 | Joann Bryant

U.S. And Canada Reach Deal To Replace NAFTA

Canada and US agree last-minute trade deal

Many economists have said Trump's tariffs will push up costs for American consumers and business and ultimately produce a drag on the USA economy.

"It looks like this trade deal will benefit both countries, but I wouldn't call it a great win for the Trump administration".

If NAFTA is indeed replaced by the new agreement, which unfortunately is completely unpronounceable as an acronym, it is unlikely that there will be large and dramatic changes to North American trade.

"As someone who voted against NAFTA and opposed it for many years, I knew it needed fixing", Schumer said in a statement.

Foreign Minister Chrystia Freeland, Canada's chief negotiator, called it a victory because it maintains tariff-free access to the US for most of the country's exports.

Prime Minister Justin Trudeau said it was a "good day for Canada".

According to reports, the USMCA includes increased access to the Canadian dairy market for us farmers, along with increased labor protections for workers.

And with that, after almost 14 months of tense negotiations, we now have a newly named regional trade agreement.

"He's a good man, he's done a good job and he loves the people of Canada", Trump said.

The Washington bureau of China's state news agency Xinhua reported the agreement on Sunday and published a follow-up story on Monday under a headline warning that it could still be rejected by the US Congress. The deal addresses adding new markets and expanding agricultural exports along with rural jobs.

According to the American Petroleum Institute (API), USMCA continues market access for natural gas and oil products produced in the United States with zero tariffs.

"This is an important first step forward, and I'm glad all three countries worked together to reach an agreement", Brown said.

Canadian Agriculture and Agri Food Minister Lawrence Mac Aulay arrives for an emergency cabinet meeting on the Nafta negotiations
Trump hails 'wonderful new trade deal' with Mexico and Canada

His victory-lap news conference Monday also drove home the point to all concerned that unpredictability remains the watchword in Canada-U.S. relations.

Likewise, outgoing Mexican President Enrique Pena Nieto said via Twitter that the deal negotiated over the past 13 months "achieves what we proposed at the beginning: a win-win-win agreement". IMF chief Christine Lagarde said the fund is poised to cut the global growth outlook, with its next update to the forecast due next week.

US Trade Representative Robert Lighthizer has been working to recruit Japan and the European Union to help pressure China to change its trade, subsidy and intellectual property practices.

The clause in the new agreement - which still needs formal approval in all three countries - gives the other partners a say in the text of such a deal.

The deal effectively maintains the auto industry's current footprint in North America, and spares Canada and Mexico from the prospect of United States national security tariffs on their vehicles.

Auto makers, particularly from Europe and Asia, may be pushed to move more of their supply chain into the region.

USMCA follows two previous trade agreements in which access to the Canadian dairy market was granted, CETA and the CPTPP, which sacrificed the equivalent of a quarter of a billion dollars annually in dairy production to industries in other countries.

Mr. Trump told reporters on Monday the tariffs on Canada and Mexico will remain "until such time as we can do something like quotas so our industry is protected".

The deal does not include any changes to separate USA tariffs on steel and aluminum levied earlier this year on Canada, Mexico, China, the European Union and others.

United Steelworkers Canadian director Ken Neumann was more direct, saying Canada "sold out" steel and aluminum workers by not getting the 25 per cent steel tariffs and 10 per cent aluminum tariffs removed. "We have survived the 14 roller coaster months of a very unpredictable president".

Some reports speculated USMCA could go into effect in 2020, but Mexico's economy minister told Reuters that it could be by the second half of 2019.

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