After months of discussions and the possibility of bilateral agreements, Canada has agreed to join the United and Mexico in a new North American Free Trade Agreement deal.
Dubbed the United States-Mexico-Canada Agreement, or USMCA, Canada struck a last-minute deal late Sunday night that nearly pushed past the U.S.-imposed midnight deadline. The Detroit News reported both U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said in a joint statement the new agreement will “strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.
The new deal tentatively replaces the 24-year-old NAFTA treaty and fulfills a significant campaign promise of President Trump. The president said he would renegotiate the trade deal or get rid of it entirely, which had initial support from the United Auto Workers. On the automotive manufacturing front, a new provision will require 40 percent to 45 percent of an automobile to be built in countries where workers earn at least $16 an hour. Anything under the wage requirement will not be subject to USMCA duty-free benefits.
Between the U.S and Canada, the agreement opens up the Canadian dairy market to U.S. farmers, but Canada convinced U.S. negotiators to keep a NAFTA-dispute resolution process the U.S. wanted to kill. The process also gives Canada protection from any tariffs the Trump administration may place on the country for cars, auto parts and truck imported into the U.S.
President Trump tweeted Monday morning and said the agreement “solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world” before adding “Congratulations to Mexico and Canada!”
Leaving his office, Canadian Prime Minister Justin Trudeau said, “It’s a good day for Canada.”
We’ll bring you the latest on the new free trade agreement as it comes.