Trade deal returns United States to ‘manufacturing powerhouse’

Trade deal returns United States to ‘manufacturing powerhouse’

Trade deal returns United States to ‘manufacturing powerhouse’

President Trump on Monday announced a hard-fought trade pact with Canada and Mexico meant to replace the North American Free Trade Agreement, saying the deal would bring a "new dawn" for American auto workers.

Central to the discussions Sunday was an effort to secure some sort of assurance that would allow Canada to avoid the dreaded Section 232 tariffs on steel and aluminum, and to protect itself from Trump's repeated threats to impose similar measures on autos.

Financial markets breathed a sigh of relief that the United States and Canada had reached a last-minute deal on Sunday to preserve a single trading zone in North America after serious worries it could fragment under Trump's trade pressures.

Trump said the Nafta rewrite would not have been reached without tariffs, adding that, even though possible tariffs have given the United States strong trade leverage, the country may not need to use them.

"This deal makes our partnership even stronger and benefits people across North America", Trudeau tweeted.

Just hours before a midnight deadline, the USA and Canadian governments agreed to a deal that would allow US farmers greater access to Canada's dairy market and address concerns about potential US auto tariffs, officials from both countries said.

"In short, we think this is a fantastic agreement for the USA, but also for Canada and Mexico", said administration officials, who cheered the fact that USA dairy ranchers would soon have "substantial" expanded access to lucrative markets north of the border.

The agreement was forged just before a midnight deadline imposed by the include Canada in a deal reached with Mexico late in the summer.

A senior Canadian government official says the USA and Canada have reached the basis of a free trade deal. But Dan Ujczo, an global trade lawyer with the US firm Dickinson Wright, said it would only apply to a very small percentage of vehicles that don't comply with the origin rules.

Trump has long criticized NAFTA as perhaps the worst deal ever made, often threatening to rip it up and upend billions of dollars of cross-border trade.

Mulroney, who negotiated the original NAFTA, said he had not yet studied the full text.

In Canada, farmers protested the increase in quotas on US dairy products including milk, yogurt, milk powder and formula. Tariffs of up to 275% have kept most foreign milk out of the Canadian market.

On Monday, free-trade veteran Brian Mulroney, noting that "the devil is in the details", nonetheless called the new agreement "a highly significant achievement" for Canada.

Canada's ambassador to Washington says the US and Canada have made a lot of progress in free trade talks but there is no deal. Washington has already reached a bilateral deal with Mexico, the third NAFTA member.

"I am pleased that the Trump administration was able to strike a deal to modernize NAFTA with both Mexico and Canada", said Senate Finance Chairman Orrin Hatch, R-Utah.

US exporters will have access to roughly 3.59 per cent of the dairy market. Positive views of the U.S. in Mexico and Canada have plummeted, jeopardizing relations on a host of security and other noneconomic issues.

Trump campaigned on a promise to rewrite NAFTA or get rid of it. Talks on a rewrite began more than a year ago. A deal that left one of them out could cause chaos for businesses that rely on trade between the countries. "That's dealing with China, dealing with European Union, with everybody, Japan, Mexico, Canada, everybody", he said. Canada is by far the No. 1 destination for US exports, and the USA market accounts for 75 percent of what Canada sells overseas.

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