Now known as the United States-Mexico-Canada Agreement (USMCA), the deal will retain NAFTA’s dispute-settling mechanism and continue to shield both Mexico’s and Canada’s media sector from US takeovers, while also limiting the number of cars that can be manufactured by Mexico in zones that pay below $16 per hour to 40%.
Critically for the US side, Canada agreed to open approximately 3.5% of its dairy market, which is heavily protected by a system of supply management. Ottawa is now expected to give US farmers greater access to Canada’s dairy market by increasing the quota on foreign imports.
For Canada, Trump’s decision to back down from his original demands and agree to keep NAFTA’s dispute resolution mechanism intact was a major victory. Canadian negotiators have long sought to keep some sort of process to challenge anti-dumping and countervailing duty cases.
“The USMCA will give our workers, farmers, ranchers, and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region,” Canada’s Foreign Affairs Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer said in a joint statement released late Sunday.
Trump had steadfastly opposed the chapter’s preservation in the days leading to the final agreement as he believes it’s a violation of the US’ sovereignty to have a multinational panel of arbiters decide on the acceptability of American tariffs.
Trump hailed the achievement while addressing journalists, saying the deal was “the biggest” and “most important ever” trade deal for the US and added that the result was a vindication for his “America First” policy. Trump claimed that these new “more reciprocal” agreements will save thousands of US jobs.
The cadre of White House officials who push Trump’s protectionist policies were pleased that Trudeau’s government decided to sign up to the USMCA without reassurances that Washington will repeal its steel and aluminium imports. The economic nationalists that surround Trump believe that these protectionist measures, which include punitive tariffs, can help salvage the declining US steel industry.
Trump’s negotiators refused to include the issue over steel and aluminium tariffs in the discussions about the USMCA saying, “There isn’t any agreement on that at this point,” a Trump administration official said. “There’s been talk about potential discussions there, but that’s on a completely separate track.”
The two sides were able to agree that no hard limit would be placed on Canadian auto exports and car parts to the US, moves that effectively, and for the time being, amount to an exemption from the steel and aluminium tariffs.
https://www.neweurope.eu/article/trumps-new-trade-deal-with-canada-mexico-to-replace-nafta/