Business

USMCA: US and Canada Reach New Trade Deal Replacing NAFTA

Image source Wikipedia

The United States and Canada have reached a new trade deal, along with Mexico, replacing the current North American Free Trade Agreement (NAFTA).

The US-Mexico-Canada Agreement (USMCA) gives the US greater access to Canada’s dairy market and allows extra imports of Canadian cars.

The deal has 34 chapters and governs more than $1 trillion in trade.

President Donald Trump, who has long sought to change NAFTA, said the new deal was “wonderful”.

Until recently it looked as if Canada could be excluded from a final trade agreement to replace NAFTA which has been in place since 1994.

The new USMCA is intended to last 16 years and be reviewed every six years.

NAFTA: Mexico Willing to Discuss Trade Deal with President-Elect Donald Trump

Following the agreement, President Trump tweeted: “Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico. The new name will be The United States Mexico Canada Agreement, or USMCA. It is a great deal for all three countries, solves the many……”

The US has been fighting trade wars on several fronts this year, including placing tariffs on steel and aluminum imports from Mexico and Canada, as part of Donald Trump’s America First policy. Tariffs on cars are also threatened.

The hundreds of pages of the agreement were released on October 1 and contain updated arrangements for Canada’s dairy industry and measures aimed at shifting lower-paid car jobs from Mexico.

On dairy, US farmers will have access to 3.5% of Canada’s $16 billion-a-year dairy market.

On cars, Canada and Mexico have a quota of 2.6 million cars they can export to the US as a protection for their car industry if the US imposes a 25% global tariff on car imports.

In addition, 40% of car parts of vehicles produced in the USMCA area must be made in areas of North America, paying wages of $16/hour.

On the lumber (or wood) industry, Canada secured protection from US anti-dumping tariffs through the preservation of a dispute-settlement mechanism.

The US made a deal with Mexico in August, but relations with Canada over the trade pact had become increasingly strained in recent weeks.

The Trump administration set September 30 as a deadline for Canada to strike a deal.

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

As part of this policy President Trump has also launched a trade war against China, which has already hurt companies and could curb global economic growth.

Clyde K. Valle

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.

Recent Posts

Donald Trump and Elon Musk Celebrate Election Victory at UFC 309

Image source: Wikimedia Commons President-elect Donald Trump celebrated his election victory at the Ultimate Fighting…

4 days ago

White House 2024: Donald Trump Wins, Kamala Harris Calls Him to Concede Election

Millions of voters across the US chose to return Donald Trump to the White House…

2 weeks ago

Who Won? Donald Trump Declares Victory as He Addresses Jubilant Supporters in Florida

Donald Trump declares victory in the US election as he addresses jubilant supporters in Florida.…

2 weeks ago

Stocks Soaring as Donald Trump Closes in on US Victory

Stocks around the world are rising as Donald Trump appears to be on the cusp…

2 weeks ago

Who Won? Kamala Harris Cancels Election Night Party as Path to Victory Narrows

Donald Trump has won Pennsylvania, North Carolina and Georgia and taken a lead over Kamala…

2 weeks ago

Quincy Jones Dead at 91

Quincy Jones, the celebrated musician and producer who worked with Michael Jackson, Frank Sinatra, Ray…

2 weeks ago