Published: Fri, October 05, 2018
Money | By Ralph Mccoy

Trilateral NAFTA revamp deal struck

Trilateral NAFTA revamp deal struck

Prime Minister Justin Trudeau says the new trade deal with the United States and Mexico is a good one for Canada that protects the agricultural supply management system and staves off threatened auto tariffs. That the old deal resulted in outsourcing is unquestioned.

A NAFTA collapse could have caused USA farmers, a key Trump constituency, to lose access to major agricultural markets in Canada and Mexico at the same time that China has halted purchases of U.S. soybeans and other commodities due to a tariff war.

Any US job gains are likely years away, but the deal provides Trump with a victory that he can tout at campaign rallies over the next month on behalf of fellow Republicans running in the November 6 congressional elections.

Trump justified the moves by arguing that the imports posed a threat to US national security.

Technology and retail companies also won protections in the new deal they hope Washington will vigorously pursue with China, where many USA industries have complained of unfair treatment. In 2016, average pay in Mexico for manufacturing was $3.91 an hour. The Trump administration's most contentious demands like its insistence that 50 percent of autos imports be American-made were dropped.

The new version would give USA farmers greater access to the Canadian dairy market.

On currency, the USMCA does something not heretofore seen in trade agreements, which is make provisions on currency enforceable in trade disputes.

After the announcement, the Canadian dollar gained around 0.5 percent to its highest rate against the U.S. dollar since May. Now those industries harmed by this practice will have an avenue for redress when it comes to trade disputes. The U.S. market absorbs 80 percent of Mexico's exports and 76 percent of Canada's. Also, there will be no forced data localization "in circumstances where a financial regulator has the access to data that it needs to fulfill its regulatory and supervisory mandate". This included stronger textile provisions than the original trade pact, created to incentivise greater USA and Mexican production in textiles and apparel trade.

Benefiting American farmers, ranchers, and agribusinesses by modernizing and strengthening food and agriculture trade in North America.

The USMCA drew praise from the left and the right. "It means far more American jobs, and these are high-quality jobs".

A little over a month after the US and Mexico struck a preliminary agreement on NAFTA's replacement, the USA and Canada did the same late Sunday, as hoped-the timing means outgoing Mexican President Enrique Peña Nieto gets to sign the USMCA into law just before leaving office.

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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.

U.S. Trade Representative Robert Lighthizer and White House adviser Jared Kushner planned to brief Trump on Sunday on the talks, said a U.S. source familiar with the discussions.

Trump blames NAFTA for the loss of US manufacturing jobs and wants major changes to the pact, which underpins $1.2 trillion in annual trade.

But that distance may be bridgeable. I believe in fair trade.

"We didn't ask to reopen NAFTA".

Thomas J. Gibson, president and CEO of the American Iron and Steel Institute (AISI), Washington, offered his statement in reaction to the announcement of USMCA.

Conservative Leader Andrew Scheer called the deal a "failure" by Trudeau to achieve anything new for Canada. "At that point, we saw everything that happened on Wednesday".

It's no longer a question of whether the Trump trade agenda is good for America.

At the end of the day, if it's a better deal, it's a better deal. "Without tariffs, we wouldn't be talking about a deal". It is absolutely critical for both Ontario and our friends south of the border that the new USMCA arrangement helps us build on that success.

The president became aware of Freeland's attendance at the "Tyrant" event as a plot to prevent Trump from meeting the prime minister at the United Nations and agreeing prematurely to a deal, a source said. "We have negotiated this new agreement based on the principle of fairness and reciprocity". Animated by seventeenth century mercantilist ideas about trade deficits, all Trump seems to know for sure is that the deficits in merchandise trade are always and automatically bad, and that all existing trade agreements, particularly multilateral agreements like the North American Free Trade Agreement (NAFTA), that produce such deficits are therefore likewise always bad.

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