Canada, U.S. agree to NAFTA replacement that includes Mexico
U.S. President Donald Trump is set to sign a successor to the North American Free Trade Agreement that will make modest revisions to a deal he once called a “disaster,” easing uncertainty for companies reliant on tariff-free commerce.
U.S. and Canadian negotiators worked around the clock this weekend to secure an agreement just before a Sunday midnight deadline, allowing leaders from those nations and Mexico to sign the accord by late November. The 24-year-old NAFTA will now be superseded by the U.S.-Mexico-Canada Agreement, or USMCA, covering a region that trades more than US$1 trillion annually.
“It is a great deal for all three countries,” Trump wrote on Twitter Monday. He added in another tweet that it solves the many “deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduce Trade Barriers to the U.S. and will bring all three Great Nations closer together in competition with the rest of the world.”
Canadian Prime Minister Justin Trudeau called it a “good day for Canada & our closest trading partners.” Jesus Seade, the Nafta negotiator for Mexican President-elect Andres Manuel López Obrador, said “NAFTA 2 will give certainty and stability to trade.”
The new accord involves improved access to Canada’s dairy market for U.S. farmers, stronger intellectual property provisions, and tighter rules of origin for auto production, according to two senior Trump administration officials who spoke to reporters on condition of anonymity.
Trump had threatened repeatedly to pull out of NAFTA, a scenario that business leaders warned would wreak havoc on their supply chains. In force since 1994, the pact eliminated tariffs on most goods. But Trump argued the U.S. had lost jobs to Mexico and seen a trade deficit swell with its southern neighbor.
Critics of the update say it could impose greater regulatory burdens on North American companies and put them at a disadvantage to those elsewhere, while doing little to change the lot of manufacturing workers in the U.S.
The Trump administration had already agreed last month to an updated relationship with Mexico, which increased pressure on Canada to make concessions to join the deal.
President Trump’s trade adviser Peter Navarro told Fox News on Monday that the new trade deal with Mexico and Canada should be signed Nov. 30 and then ratified. “Nafta is dead. We have USMCA,” he said, using the acronym for U.S.-Mexico-Canada Agreement.
Canada to host meeting on World Trade Organization reform, but without U.S. and China for now
Canada plans to convene a meeting of trade ministers to discuss how to reform the troubled World Trade Organization but the United States and China will be left out for now, an official said on Friday.
The WTO is facing an increasingly serious crisis amid complaints by U.S. President Donald Trump that the body is biased against the United States.The meeting would take place in October in Ottawa and played down the suggestion Beijing and Washington were being snubbed.Actually it’s a working group of like-minded nations to act as a catalyst for action, for concrete proposals. The intent is to broaden that group once there are concrete proposals to discuss.
Why THE US-China trade dispute has experts worried
The world’s two biggest economies are at loggerheads.The US is considering 25% tariffs on $200bn (£152bn) of Chinese goods, much higher than the 10% it previously indicated it might impose, reports say.Meanwhile China has already retaliated, after US tariffs on $34bn of Chinese goods came into effect last month.”If someone wants a trade war,” China’s commerce minister has said, “we will fight to the end.”President Trump is bullish, threatening further tariffs and tweeting: “Trade wars are good, and easy to win.”