The end of NAFTA, the beginning of USMCA.....
The United States and Canada confirmed Sunday they had reached a deal on a "new, modernized trade agreement," which is designed to replace the 1994 NAFTA pact.
In a joint statement the two nations said the new deal would be called the United States-Mexico-Canada Agreement (USMCA).
Canadian Prime Minister Justin Trudeau said following a cabinet meeting, "It's a good day for Canada"
Trudeau plans to address the media on the deal on Monday.
The agreements reportedly boost U.S. access to Canada's dairy market and protect Canada from possible U.S. autos tariffs.
President Trump's administration has said Canada must sign on to the text of the updated NAFTA by a midnight Sunday deadline or face exclusion from the pact. Washington has already reached a bilateral deal with Mexico, the third NAFTA member.
If Canada did not sign a new deal, Trump had threatened to impose steep tariffs on all automotive imports.
In late August, the U.S. and Mexico negotiated a new pact to replace NAFTA, snubbing Canada in the process. President Trump has also repeatedly suggested that he might leave Canada out of the new agreement -- which would be called the “United States-Mexico Trade Agreement.”
Complete text:
https://www.foxbusiness.com/politics/us-canada-likely-to-conclude-nafta-talks-this-weekend-report
Sounds like another win, no?
Wow Canada lost 3.3 % of its milk in the TPP agreement and now a few percent increase to American milk and dairy
The dairy quota is that a powerful win by Trump? Trump got nothing basically we agreed to this same amount in the TPP trade agreement with a little increase for America milk and dairy.. In the meantime Trump cancelled the TPP while Canada signed the TPP agreement and Canada has a trade agreement with the EU..
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What a terrible lose for Canada and a great win for the master of the no deal trump.
The U.S. and Canada reached a deal late Sunday to update the North American Free Trade Agreement, with each side bending on core issues.
The two countries will now join Mexico in updating the 1994 accord, which will be renamed the United States-Mexico-Canada Agreement. Here are highlights of what they agreed to:
1. Autos
NAFTA talks were conducted under threat of a steep escalation of tension: imposition of U.S. auto tariffs. The deal struck Sunday offers a measure of protection for both Canada and Mexico, ensuring each country won’t be affected by any auto tariffs unless exports top 2.6 million units annually.
For each, that represents their current exports plus growth of at least 40 per cent — enough to mean that if the tariffs are leveled against the rest of the world, they likely wouldn’t hit Canada and Mexico for a couple of years. There’s no guarantee that the Trump administration will impose the tariffs at all, or keep them in place that long.
As expected, the deal calls for cars to have 75 per cent of their content originate in the U.S. and Mexico, up from the current 62.5 per cent, and for 40 per cent of a car to come from workers whose pay averages more than $16 per hour. The rules are a central part of the U.S. strategy to rebalance manufacturing to benefit American workers.
2. Other Tariffs
The deal doesn’t resolve the dispute over U.S. tariffs on steel and aluminum imports from Canada and Mexico — or the retaliatory tariffs that each country placed on them. But going forward, it did give a guarantee that no tariff applied under the same U.S. law could be imposed against Canada or Mexico for at least 60 days. During that period, “the United States and Canada shall seek to negotiate an appropriate outcome based on industry dynamics and historical trading patterns,” the countries agreed.
3. Dispute Panels
NAFTA had three kinds of dispute settlement systems. The new deal will see two remain basically unchanged, but renamed, according to senior White House officials. State-to-state dispute settlement — formerly in Chapter 20 — is being kept. It has many critics, particularly in the labor community, because panels often get blocked and disputes linger for years.
The old NAFTA’s so-called Chapter 19 dispute-settlement mechanism — which hears bi-national anti-dumping and countervailing duties cases — remains untouched in the new agreement, the officials said. Canada dug in to save those.
Investor-state dispute settlement, formerly in Chapter 11, will be phased out between the U.S. and Canada but remain in place for certain key sectors — such as oil and gas, infrastructure and telecommunications — between the U.S. and Mexico, according to the White House officials.
4. Dairy
As part of the deal, the U.S. is getting expanded access to Canada’s protected dairy market, long a thorn in the side of trade talks. Canada will eliminate its so-called Class 7 milk pricing system, a senior U.S. administration official told reporters. New measures will prevent Canada’s system from spilling outside its borders, while market access for the U.S. will exceed Canada’s concessions in Trans-Pacific Partnership talks, the U.S. official said.
Canada gave up 3.3 per cent of its market in those TPP talks, but the U.S. has since quit the deal.
5. No Sunset
The U.S. had demanded a sunset clause that would kill NAFTA after five years unless the countries agreed to extend it. Few ideas upset the Canadians and Mexicans more than that. In the end, the countries agreed to a 16-year term for the deal, with a review to identify and fix problems and a chance of a deal extension after six years. U.S. Trade Representative Robert Lighthizer said in August that the review mechanism is designed to solve problems and prevent them from festering, rather than to terminate the deal.
6. Intellectual Property
The office of the U.S. Trade Representative boasted that the deal would provide “new protections for U.S. intellectual property,” which the U.S. had been seeking. Copyright will, for instance, extend 70 years after an author’s death.
7. Higher Thresholds
Both Canada and Mexico agreed to raise the thresholds at which they apply duties to cross-border purchase, another key U.S. demand. Mexico raised its so-called de minimis level to $100 from $50. Canada raised its to $150 for duties, from $20 earlier, and $40 for sales taxes.
Bloomberg.com
