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NAFTA REBOOT FOR DUMMIES: How does new trade impact Canadians?

05 Octobre 2018

The deal is due to be signed by the leaders of the U.S., Canada and Mexico by end of next month, but at that point each country will still need to ratify it.

Josh Kallmer, executive vice president for policy at the Information Technology Industry Council, said the trade deal's provisions are important not so much because of business risks in Mexico or Canada, but because any trade agreement is "a powerful way to steer the conversation globally". "When this improved agreement is implemented, North American trade will be preserved and modernized for the 21st century - just as we set out to do".

The United States and Mexico want to push a deal they separately negotiated through their respective legislatures before Mexican President-elect Andres Manuel Lopez Obrador takes office on December 1.

The new deal will be called the USMCA deal, basically, because Donald Trump didn't like the sound of the acronym NAFTA, which offers some insight into just how petty negotiations can get, but such is the reality when dealing with Trump.

In a joint statement late on Sunday, US Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said the agreement "will strengthen the middle class, and create good, well-paying jobs and new opportunities for the almost half billion people who call North America home".

"We would like to thank Mexican Economy Secretary Ildefonso Guajardo for his close collaboration over the past 13 months".

Once again, President Donald Trump is racing circles around his critics and showing that his tariff policy and the threat of leaving NAFTA altogether were most effective inducements to trade concessions, having resulted in the new U.S. -Mexico-Canada Agreement, or the USMCA.

Tariff side deals: The US came to side agreements with Mexico and Canada that would largely protect the two countries from tariffs on imported autos and auto parts.

The agreement also exempts tariffs on 2.6 million cars.

Mexico had previously given the green light to a preliminary agreement with the USA that could replace NAFTA. "We'll get rid of the name NAFTA", he told the press, because it "had a bad connotation because the United States was hurt very badly by NAFTA for many years".

Since late Friday there have been strong indications that Ottawa was ready to make a deal in hopes of saving the three-way trade agreement. The portion of it most pertinent to dairy farmers in Northern New York, though, look very good.

"The current Section 232 tariffs are hurting US aluminum companies, making them less competitive on the world stage", Brock says.

Roland Paris, a former foreign policy adviser to Trudeau, expressed relief that the deal is done but anxious about the long-term relationship between the two countries.

"In the next few weeks, Canadians are expecting transparency from the Liberal government".

But relations between Ottawa and Washington soured. Since the creation of NAFTA two decades ago, the equipment manufacturing industry has benefited greatly from duty-free access to our industry's largest two export markets, Canada and Mexico.

In a copy of the letter Trump sent to the Speaker of the House of Representatives and to the President of the Senate, Trump said he meant to initiate trade negotiations with both countries, and enter the agreement by the end of November 2018, saying that "dramatic progress" has been made related to several areas.

Ontario Premier Doug Ford speaks in the legislature at Queen's Park on Monday, Sept. 17.

"We didn't ask to reopen NAFTA".

"This new focus on Capitol Hill - when legislators come down, they go to Capitol Hill in recognition that Congress really, truly counts, and the cabinet ministers, who are also legislators, have got to recognize that they can use those peer-to-peer relationships".

Farmers in the states will have greater access to Canada's dairy market now that Canada has agreed to drop its Class 7 pricing system, which allowed processors in Canada to buy skim milk from Canadian farmers at lower prices.

He did note that we should be concerned about aluminum and steel tariffs that remain in place. "We are not going to allow our steel industry to disappear, it was nearly gone". Our government will continue to vigorously defend and advance Ontario's economic interests at home and overseas.

Trudeau did win a face-saving preservation of a key trade dispute settlement mechanism to fight USA anti-dumping tariffs.

The latter had been used on several occasions to successfully challenge USA anti-dumping and countervailing duties on its lumber and other key sectors.

Time will tell to what extent the USMCA helps USA workers and boosts our economy.

NAFTA REBOOT FOR DUMMIES: How does new trade impact Canadians?