Trump claims vindication as Canada joins NAFTA replacement
President Trump checked off a major campaign promise that seemed impossible when he made it: rewriting the 24-year-old North American Free Trade Agreement with Canada and Mexico.
A weekend of hard bargaining got Canada at the last moment to join a U.S.Mexican deal, retaining a three-way agreement to govern the $1.2 trillion in annual trade among the countries.
The deal aims to revive U.S. manufacturing jobs, open markets to American agriculture and add restrictions to Mexican and Canadian products entering the U.S. Mr. Trump obtained long-sought concessions from Ottawa to open its restrictive dairy markets and refrain from currency manipulation. Canada was able to protect an independent panel to adjudicate trade disputes that the U.S. wanted to eliminate.
Supporters of Mr. Trump say his hard line and willingness to use tariffs and other measures secured a deal far more favorable to U.S. manufacturers and farmers. Skeptics say the deal amounted to a rebranding of NAFTA that will have an uncertain impact on large Mexican trade surpluses that have infuriated the president.
Mr. Trump harbored no such doubts. He held a celebratory briefing alongside U.S. Trade Representative Robert E. Lighthizer and top adviser and son-in-law Jared Kushner to mark the death of a trade agreement he has long detested.
“I have long contended that NAFTA was perhaps the worst trade deal ever made,” Mr. Trump said at a Rose Garden press conference to announce an agreement that he described as nothing less than historic.
He later added, “We have negotiated this new agreement based on the principle of fairness and reciprocity. To me, it’s the most important word in trade because we’ve been treated so unfairly by so many nations all over the world that we’re changing that.”
Canadian Prime Minister Justin Trudeau, who clashed with Mr. Trump as the talks dragged on, praised the final agreement as “profoundly beneficial” for Canadian families and the middle class — even though Canada’s dairy farmers issued a statement condemning the deal.
“We never believed it would be easy, and it wasn’t,” Mr. Trudeau told reporters in Ottawa. “But today is a good day for Canada.”
Mexican President Enrique Pena Nieto, who leaves office in December, said via Twitter that the deal negotiated over the past 13 months “achieves what we proposed at the beginning: a win-win-win agreement.”
Provisions in the accord — including stopping foreign countries from assembling cars in Mexico and shipping them tax-free into the U.S. — would support “hundreds of thousands American jobs,” Mr. Trump said.
To mark the definitive end of NAFTA, Mr. Trump and his aides were calling the agreement the U.S.-Mexico-Canada Agreement, or USMCA.
Mr. Lighthizer said completing the deal in 14 months was a historic feat.
“In trade negotiating terms, that’s like warp speed,” he said.
Wall Street rallied on the news of the deal, driving the Dow Jones industrial average up 192 points, or 0.73 percent, to close at 26,551.
It is the latest in a series of Mr. Trump’s aggressive “America First” trade moves.
The administration scrapped the 12-country Trans-Pacific Partnership, rewrote the free trade accord with South Korea and forced Japan and the European Union to enter into talks on bilateral deals. The USMCA also could provide a boost for Mr. Trump’s escalating trade war with China, America’s largest trading partner, over Beijing’s unfair practices and theft of intellectual property.
Mr. Trump saw the deal as vindication of his use of tariffs as leverage in trade negotiations.
“Without tariffs we wouldn’t be talking about a deal. Just for those babies out there that keep talking about tariffs. That includes Congress, ‘Oh please, don’t charge tariffs,’” he said, using whining tones to mock critics, including many Republican lawmakers who warn that tariffs cause higher prices and lost jobs.
Agreements to protect U.S. automakers and autoworkers were key elements of the deal. The USMCA also adds protections for labor rights and the environment — elements long sought by liberal and labor groups, and for the first time sets rules for internet commerce that were barely contemplated when NAFTA was ratified in 1994.
The deal was applauded by trade associations for farmers and manufacturers, who expressed relief that it was a three-way agreement.
Mr. Trump commended Mr. Pena Nieto and Mr. Trudeau for reaching an accord that benefited all three countries.
Mr. Trump said the friction with Mr. Trudeau did not affect the negotiations because they were both “professionals” looking out for the people who elected them. The three leaders are expected to sign the agreement in late November at the Group of 20 summit in Buenos Aires.
The deal will then go to Congress, where it will not likely get a vote until next year after a new and potentially Democrat-run Congress is sworn in. Mr. Trump acknowledged that passage of the trilateral trade deal is not guaranteed on Capitol Hill.
“Anything you submit to Congress is trouble, no matter what,” Mr. Trump said, predicting that the Democratic reaction would be: “Trump likes it, so we’re not going to approve it.”
But with many liberal Democrats and labor unions long critical of NAFTA, Mr. Trump’s revisions could face a friendly reception.
“As someone who voted against NAFTA and opposed it for many years, I knew it needed fixing. The president deserves praise for taking large steps to improve it,” Senate Minority Leader Charles E. Schumer, New York Democrat, said in a statement. Any final agreement “must be judged on how it benefits and protects middle-class families and the working people in our country,” Mr. Schumer said.
The path to final approval will be easier in Canada and Mexico. The Trump administration reached an agreement with Mexico in August to replace NAFTA.
Mr. Trump then threatened to slap tariffs on autos from Canada if Ottawa didn’t get on board. He gave Ottawa an Oct. 1 deadline to join the deal before the U.S.-Mexico deal was submitted to Congress. The negotiations went down to the wire, when both sides made concessions.
The compromise included Canada opening its market to American dairy products that had been subject to tariffs as high as 270 percent.
The Trump administration backed off demands for the elimination of NAFTA’s so-called Chapter 19 dispute resolution boards for issues such as anti-dumping and countervailing tariffs. Canada wanted Chapter 19 to challenge U.S. tariffs on steel and aluminum.
The tariffs on steel and aluminum, a huge irritant for steel-producer Canada, were not addressed in the USMCA but will be taken up in later negotiations, U.S. officials said.
The fast pace of negotiations was tied to Mexico’s political calendar.
Mr. Trump wanted the deal singed before Mr. Pena Nieto leaves office Dec. 1. He will be replaced by Mexican President-elect Andres Manuel Lopez Obrador, who has voiced support for the deal but could change his position once in office.
David R. Sands contributed to this report.
President Trump held a press conference to announce the new trade agreement for the U.S., Mexico and Canada. “I have long contended that NAFTA was perhaps the worst trade deal ever made,” he said.
Canadian Prime Minister Justin Trudeau said the United States-Mexico-Canada Agreement will be “profoundly beneficial” to families and the middle class.