US, Canada finally in rebranded Nafta
US 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.
US 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 The 24-year-old Nafta will now be superseded by the US-Mexico-Canada Agreement, or US MCA, covering a region that trades more than $1 trillion annually.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 US and will bring all three Great Nations closer together in competition with the rest of the world.”
The deal caps a turbulent period for relations between the US and Canada, traditionally close allies on national security and trade. The alliance was severely tested by Trump’s aggressive negotiating style and Prime Minister Justin Trudeau’s willingness to stand his ground on key issues such as dairy and dispute settlement.
US equity futures, Canada’s dollar and Mexico’s peso all gained on the news. The loonie climbed to its strongest since May against the greenback, while the Mexican peso rose as much as 1 per cent.
The new accord involves improved access to Canada’s dairy market for US farmers, stronger intellectual property provisions, and
tighter rules of origin for auto production, according to two senior Trump administration officials who
DONALD TRUMP, US PRESIDENT
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 US had lost jobs to Mexico and seen a trade deficit swell with its southern neighbor.
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.
The last-minute agreement on Sunday allows the countries to sign the deal with Mexico’s outgoing president, Enrique Pena Nieto, before he leaves office on December 1. Lawmakers from the three countries would still need to approve the pact. The new deal likely won’t be voted on by the US Congress until 2019. The Democrats may take control of the US House in midterm elections in November, which could undermine Trump’s ability to win approval.
“IT IS A GREAT DEAL FOR ALL THREE COUNTRIES. IT SOLVES THE MANY DEFICIENCIES AND MISTAKES IN NAFTA, GREATLY OPENS MARKETS TO OUR FARMERS AND MANUFACTURERS, REDUCE TRADE BARRIERS TO THE US AND WILL BRING ALL THREE GREAT NATIONS CLOSER TOGETHER IN COMPETITION WITH THE REST OF THE WORLD.”