Wall Street gets boost from NAFTA replacement deal

Ann Santiago
October 2, 2018

USA officials intend to sign the new trilateral deal by November 30, Navarro said. It also offers Mexico and Canada partial protection from broader auto tariffs the Trump administration has threatened to impose, but falls short of marking those countries exempt.

That said, farmers who initially protested when the previous Conservative government agreed to open up the market slightly in deals with the European Union and Pacific nations backed off when Ottawa made clear they would be compensated.

Then U.S. Trade Representative Robert Lighthizer, Freeland's counterpart, came up with the idea that instead of demanding a certain percentage of the vehicle had to be made by the U.S., it would require a percentage of the auto to be manufactured by workers earning high wages.

"This is going to be one of the most enforceable trade agreements we've ever had", one official said. The president said the name has a "good ring to it", repeating U-S-M-C-A several times.

Trump said he would sign the final agreement in late November, in about 60 days, and the pact is expected to be signed by Trudeau and by Mexico's Pena Nieto who leaves office December 1.

Additionally, while speaking to reporters, Trump said that USMCA, which "has a good ring to it", is about fairness and reciprocity.

Those remarks set the stage for a bitter struggle over trade, with Trump threatening to drop Canada from the regional trade pact altogether if it didn't yield to key USA demands.

The deal aims to brings more jobs into the United States, with Canada and Mexico accepting more restrictive commerce with the United States, their main export customer.

The US and Canada on Sunday sealed the deal on the US-Mexico-Canada Agreement, the first major update of the 25-year-old North American Free Trade Agreement. "We certainly are pleased to see that there was an agreement over the weekend but, at the same time, we're very disappointed that current USA tariffs on aluminum imports from Canada haven't been lifted".

Canadian Prime Minister Justin Trudeau said he would continue to press for the lifting of the tariffs.

The new deal covered trade between the three countries worth $1.2bn and was "truly historic", he said.

But it was Kushner's close relationship with Telford that sources are crediting with getting the U.S. and Canada to this breakthrough. Positive views of the United States in Mexico and Canada have plummeted, jeopardizing relations on a host of security and other noneconomic issues.

"I don't think it did".

Trump has regularly blasted NAFTA as disastrous for the USA economy.

On the campaign trail, Donald Trump harshly criticized free trade deals, threatening to withdraw the US from the Trans-Pacific Partnership as well as the North American Free Trade Agreement, which he called "the worst trade deal".

The Trump administration had threatened to proceed with a Mexico-only trade pact as USA talks with Canada foundered.

While changing NAFTA and bringing down United States trade deficits was a top Trump campaign pledge, Sunday's agreement largely leaves the broader deal intact and maintains supply chains that would have been fractured under weaker bilateral deals.

The most significant difference between NAFTA and the USMCA may be as simple as the rebranding exercise itself, which some observers said would hand Trump political capital, regardless of its substance.

Eighty-four percent of aluminum produced in Canada, or 2.5 million metric tons, is exported to the US each year, meaning the 10 percent tariff imposed by the Trump administration poses a significant threat to the Canadian industry.

"We don't like their representative very much", Trump said, in a comment widely believed to be directed as Canada's Foreign Affairs Minister Chrystia Freeland.

One of the officials - both of whom spoke on the condition of anonymity because they are not authorized to speak publicly - said the discussions between Canada and the United States were ongoing, but that progress was being made.

Canadian Prime Minister Justin Trudeau said his country was in a more stable place now that it had completed the negotiations.

Farmers in the United States would also gain greater access to Canada's dairy market through the deal.

Other reports by

Discuss This Article