New NAFTA deal could have impact on regional auto industry

Dairy farmers in Ontario are expressing concern about the new USMCA trade deal

Dairy farmers in Ontario are expressing concern about the new USMCA trade deal

The new U.S. -Mexico-Canada Agreement allows any of the countries to withdraw from the deal on six-month's notice if one of the partners enters into a free trade agreement with a non-market economy - language widely seen as referring to China.

The loonie soared higher in the wake of news that Canada has reached a deal to join the United States and Mexico in a new North American trade agreement.

"I think the bigger problem is that the USA administration is going to try to oversell this deal", he said. According to the terms, the committee will assemble within one year after the new agreement is ratified and then once a year afterward.

The main goal of the agreement for the United States is to have more vehicle and truck parts made in North America.

At a press conference in Ottawa, Trudeau and Foreign Affairs Minister Chrystia Freeland told reporters that the federal government will fully compensate dairy farmers for any losses they suffer as a result of the new agreement.

But, as Boot says, this is a pattern for the president.

The US appears to be willing to give up demands to drop independent dispute resolution panels if it can have greater access to the Canadian dairy market.

"The rationale agreed to under USMCA aligns with this approach, and in no way infringes on Canada's sovereign right to develop commercial relations with any country of its choosing".

Trump fulfilled a campaign pledge by withdrawing support for Mr. Obama's proposed Trans-Pacific Partnership.

"We are associating ourselves with countries that promote market freedom and that promote free trade in the world, free trade under equal circumstances", said Juan Pablo Castañon, head of the Consejo Coordinador Empresarial (CCE), which represented Mexico's private sector during the NAFTA trade talks.

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The agreement also in effect shields Mexico and Canada from the section of US law that allows the White House to impose tariffs for national security reasons, the tool Mr. Trump is using to threaten auto tariffs and has cited to impose steel and aluminum duties. "They're happy but not delighted", said Doug Porter, chief economist at the Bank of Montreal. Where those included language reinforcing seven worldwide environmental agreements, the new agreement has only weak language on some and no language on others, says Ben Beachy, a trade-law expert at the Sierra Club, based in Oakland, Calif.

The Chamber of Commerce of Metropolitan Montreal said it's happy with the deal for the most part, particularly because it will maintain access to USA markets for local exporters.

Why are dairy farmers so upset?

This was the first time Trump had said he did not plan to impose auto tariffs on Canada.

That means that Canada will have to continue with its targeted retaliatory tariffs, which certainly won't bring the US economy to its knees, but will impact those targeted local economies.

The deal also gives modernized protections to things like patents and intellectual properties.

NAFTA 1.0 wasn't the awful deal President Trump said it was, but NAFTA 2.0 is an improvement and, more importantly, it tells us good things about Trump's skill at deal making.

"I don't think it's going to be a big number [of jobs], either way", Mr. Reinsch says. In exchange, both Mexico and Canada get to avoid American tariffs on automobiles for sixteen years .

"This objection is largely more philosophical than practical - the idea of having quotas as a side letter to a free trade agreement". This is why NAFTA 2.0 includes a rule that each member has to warn each other if they're going to negotiate a free trade agreement with a non-capitalist country.

But trade deals have always been criticized for doing too little on issues like protecting water, air, and fisheries, and some analysts say Trump's revisions of NAFTA don't depart from that pattern.

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