Published: Tue, October 02, 2018
Global Media | By Garry Long

Trump set to sell new Mexico-Canada trade agreement

Trump set to sell new Mexico-Canada trade agreement

A side-letter to the agreement showed that Trump preserved the ability to impose threatened 25 percent global tariffs on autos while largely exempting passenger vehicles, pickup trucks and auto parts from Canada and Mexico.

The United States and Canada forged a last-gasp deal on Sunday to salvage a three-country, $1.2 trillion open-trade zone agreement with Mexico that had been about to collapse after almost a quarter century.

Canada also successfully pushed to keep a special dispute process, called Chapter 19, intact.

According to a joint statement between the nations, "USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region".

"I don't think it did".

The senior administration officials announced agreement on the USMCA an hour before the USA -imposed deadline for a deal. US dairy farmers will receive additional access to the Canadian market.

After 20 months in the White House, the president has upended relations with countries that account for roughly two-thirds of the $3.9 trillion in goods that the USA buys and sells globally.

Keeping chapter 19 will not affect Washington's enforcement of anti-dumping and anti-subsidy laws, said a US official.

"While auto tariffs are off the table, they never should have been there in the first place. The practical consequences are limited, if any".

He said it's not only dairy affected by the new agreement, concessions will also affect Canada's other supply-managed sectors which includes chicken, turkey and eggs.

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Under US law, the White House is required to submit the text of the trade deal to Congress 60 days before signing - and officials barely made it by midnight. "This gives us a significant new form of leverage in terms of encouraging people to come up to the mark and really fully comply with all of their obligations".

Trump acknowledges that he had "very strong tensions" with Prime Minister Trudeau.

US stock index futures also rose, with S&P 500 Index e-mini futures rising by more than 0.5 percent, suggesting the benchmark index would open near a record on Monday.

Trudeau arrived at his office Sunday night but did not comment as he walked by reporters ahead of the unusual late meeting with his ministers.

And he cheered the fact it will give American farmers and dairy producers greater access to markets in Canada and Mexico, protect auto manufacturing jobs and encourage innovation on USA soil. One of the administration officials described the agreement as "a great win for the president and a validation of his strategy for worldwide trade".

Officials from the Prime Minister's Office said there will be another cabinet meeting in the morning and likely a news conference, too.

But the USA and Canada had trouble dealing with other areas in the pact, including Canada's dairy industry, its insistence on a strong dispute settlement mechanism and concerns about intellectual property and culture.

From a Mexican perspective, the agreement will allow outgoing President Enrique Peña Nieto to sign the agreement before he leaves office on December 1 and will allow incoming President Andrés Manuel López Obrador to start his six-year term with a fixed framework for economic relations with a northern neighbor that buys 80 percent of its exports.

Officials reached a breakthrough on the US-Mexico-Canada Agreement in 11th-hour negotiations Sunday night, calming fears that the trilateral deal could be scrapped when a self-imposed deadline hit hours later. Some of these provisions might be hard to enforce, but the Trump administration says it is committed to ensuring these happen - a reason United States labour unions and some Democrats are cheering the new rules.

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