US, Mexico and Canada sign new trade deal

Geneva Stokes
December 2, 2018

The Trump administration dubbed the agreement the U.S. -Mexico-Canada Agreement, or USMCA.

Trump faces a series of diplomatic challenges over the weekend, most notably whether he can strike an agreement with Xi.

As a matter of fact, Philip Levy, a trade official in President George W. Bush's White House, says, "President Trump has seriously overhyped this agreement".

As of Friday, Canada's official website had a page dedicated to the agreement, which it called the Canada-United States-Mexico Agreement, or CUSMA.

Trump imposed the duties earlier this year to protect U.S. producers, claiming it is in the United States national security to protect those domestic industries.

Trump has repeatedly argued that NAFTA has also hurt domestic workers by making it easier to outsource jobs. "The true reason is rooted in the domestic political situation in the United States", Zakharova added.

While industry reaction was positive, with groups relieved that the long, contentious negotiations were able to maintain tariff-free trading among the countries, the American Chemistry Council called on Trump to eliminate all tariffs and quotas for steel and aluminum.

Ending the NAFTA would have meant tearing up the continent's closely integrated auto supply chain.

The deal mostly leaves NAFTA in place, but does help the USA auto industry by requiring that 40 percent of vehicles be made where workers make at least $16 an hour.

Relations between the us and Canada took repeated blows during the negotiation Trump initiated in August 2017, largely because of his public attacks on Trudeau.

United States labor groups have also withheld support so far over the enforceability of the new standards.

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The new agreement doesn't lift the tariffs on steel and aluminum, with both the Mexican and Canadian governments stating their displeasure that the issue has not yet been solved.

The USMCA will also need to be ratified by the legislatures of Canada and Mexico.

Meanwhile, a number of lawmakers and business groups are trying to push for the removal of USA tariffs on steel and aluminum imports from Canada and Mexico, which have inflicted harm upon American manufacturers and consumers, raising costs for a wide array of industries.

The agreement prohibits the importation of goods produced by forced labor. Canada, however, has refused to limit future exports to the US but has pledged to assist the limiting cheap steel imports from China, Eric Miller, president of Rideau Potomac Strategy Group, told the Washington Post.

"It's been so well-reviewed I don't expect to have much of a problem" getting the pact through the U.S. Congress, Trump said at the signing ceremony. And while we don't know the final details of the USMCA, we do know that it largely resembles, in many ways, what was there before.

Maine's dairy industry could benefit from more market access in Canada, even though it will not be shipping milk across the border directly, said Julie Marie Bickford, from the Maine Dairy Industry Association. This is estimated to double US exports of grain to Canada.

The agreement now proceeds to ratification in each country.

When NAFTA took effect in 1994, e-commerce hardly existed in its current form and modernizing its provisions was a key premise of the talks.

Tucked in the agreement is a provision that appears created to stop either Canada or Mexico from seeking a better deal with Beijing.

Earlier this month, a coalition of no fewer than 40 Republicans in Congress wrote to Trump urging him not to sign the agreement, expressing disdain for "inappropriate" and "insulting" language that commits the three countries to supporting and protecting sexual orientation and gender-identity rights.

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