US, Canada reach new deal to keep NAFTA as a trilateral bloc

Just a few hours before deadline, the United States and Canada agreed to sign a new deal that will keep the North American Free Trade Agreement as a trilateral bloc, although its name is likely to change to the United States-Mexico-Canada Agreement (USMCA).

The new deal “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,” said U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland in a joint statement.

The Trump administration had set up a deadline for midnight September 30 so that Congress could get a 60-day period to review the new deal, allowing Mexican President Enrique Peña Nieto to co-sign it before leaving office on December 1. Congress can suggest changes during that time.

According to several U.S. media outlets, under the new deal, U.S. farmers will get greater access to Canada’s dairy market. In exchange, a mechanism for resolving trade disputes that the Trump administration wanted to remove will remain in place. 

Besides, just like Mexico, Canada managed to protect its auto industry, or at least a quota of 2.6 million vehicles, from possible U.S. tariffs.

In Mexico, Jesus Seade, the NAFTA negotiator designated by President-elect Andres Manuel Lopez Obrador, celebrated the trilateral agreement. “The door is closed to the fragmentation of the region. NAFTA 2 will give certainty and stability to Mexican trade with its partners in North America,” he said on Twitter.

MexicoNow

Related

New rules of origin will speed up automation, analysts say

New NAFTA rules lead to consider most-favored-nation tariff, says report

New NAFTA auto rules won’t be as disruptive as expected, analysts say