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

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US President Donald Trump touted a new trade deal with Canada and Mexico as a win for American workers while investors breathed a sigh of relief that the key pillars of NAFTA had survived his hardball strategy to reshape global commerce, Reuters reports.

A protectionist policy under the Mr Trump has seen the U.S. forge ahead with individual trade deals, rejecting bigger multi-lateral trade agreements and posing a challenge to decades of global free trade.

Apart from the imposition of USA tariffs on the local market, Jiang describes as a "murderous clause" the one that allows US control over Canadian diplomacy included in Article 32.10 of the Free Trade Agreement (NAFTA) with non-market-economy countries, something adjusted to China.

The United States-Mexico-Canada Agreement unveiled on Sunday night has provisions that are expected to benefit the US and Canadian auto industries, including requiring 75 per cent of a vehicle be produced in North America, up from 62.5 per cent, and USA quotas that are far above Canadian exports. US President Donald Trump imposed taxes on imports from Mexico and Canada, and the two countries retaliated.

"It 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".

Ford and General Motors shares both climbed more than 1 percent after the announcement.

In August - more than a year into the negotiations - the United States and Mexico announced they had reached a two-way deal, after breaking away for bilateral talks on their outstanding issues.

The Daily Farmers of Canada, an organization that represents Canadian farmers, has issued a statement criticizing the agreement, saying that it will limit exports and make them give up almost 3.6 percent of their dairy sector. "But today is a good day for Canada". "Without tariffs, we wouldn't be standing here", he said.

Most critical of the deal was the dairy industry, which railed against expanded US access to the domestic dairy market and the elimination of competitive dairy classes. Agricultural products will continue to have zero tariffs, as they did with NAFTA, and United States producers are set to have increased access to export animal products including dairy, poultry and eggs to Canada, while Canada has improved access to U.S. markets for dairy, peanuts and peanut products. NAFTA underpins about US$1.2 trillion in annual trade between its three member countries.

The agreement provides extra protection to drug companies in the much larger USA market, as well.

Since 2008, the Mexican peso has depreciated against the US dollar by fifty percent, from $0.10 per $1 USD to $0.05 per $1 USD.

Experts told the National Post that Canada is now even less likely to enter formal talks with China because of a clause in USMCA that places restrictions on free trade agreements with "non-market" countries, including letting other USMCA partners review agreements with such countries before they are signed.

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She said the insertion of a minimum wage level for auto parts workers could lead to similar clauses in other trade deals: "If it turns out to be very politically popular in the U.S. it could [be used again]".

For the USA oil industry, which was anxious that Mexico's incoming president, Andres Manuel Lopez Obrador, will treat foreign investors unfavorably in the energy sector, the deal provided new assurances.

Trump hasn't made his disdain for NAFTA a secret, calling it the "worst trade deal ever made" and a job-killing "disaster" for the United States.

In USMCA's Rules of Origin, ISRI notes that waste and scrap "maintain the same origin classification as in the NAFTA in that scrap materials are considered "originating" in North America if processed in one of three countries ... as well as derived from used goods collected in one of the three countries for purposes of extracting raw materials".

"This a victory for Canada because that amount is actually well above what we now send south of the border".

The new trade pact is significantly better than an all-out trade war, but won't be a game changer for Canadian growth, said CIBC chief economist Avery Shenfeld.

"Everyone is trying to entrench themselves in their region to compete with other regions", Guajardo told Mexican radio.

Mexico will get an auto parts quota of $108 billion annually, while Canada will get a parts quota of $32.4 billion annually in the event of US autos tariffs.

The deal does not include any changes to separate USA tariffs on steel and aluminum levied earlier this year on Canada, Mexico, China, the European Union and others.

Both Trudeau and Mexican Foreign Minister Luis Videgaray said the tariffs needed to be removed before the new trade deal is signed on November 30. "We don't like their representative very much".

The president became aware of Freeland's attendance at the "Tyrant" event as a plot to prevent Trump from meeting the prime minister at the United Nations and agreeing prematurely to a deal, a source said.

US and Canadian negotiators worked around the clock this weekend to secure an agreement just before a Sunday midnight deadline, to clear a procedural hurdle so leaders from those nations and Mexico are able to sign the pact by late November.

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