After more than a year of negotiations, the U.S, Canada, and Mexico finally came into an agreement on the North American Free Trade Agreement (NAFTA). The new trade deal will be called the United States-Mexico-Canada Agreement (USMCA).
On many occasions, President Trump has labelled NAFTA as “the worst trade deal ever made” and even went as far as calling it a “bad joke.”
On Monday, President Donald Trump said that the new NAFTA would provide more “jobs and cash” into the United States. He claimed it was a vindication of his aggressive use of tariffs and vowed to keep imposing them to extract deals from other trading partners, like the European Union and Japan.
“We had very strong tensions,” Mr. Trump said. “It was just an unfair deal, whether it was Mexico or Canada, and now it’s a fair deal for everybody. It’s a much different deal. It’s a brand-new deal. It’s not NAFTA redone.”
Contrary to the President’s claims, trade experts say that the old NAFTA is pretty much intact except for some changes. The key differences lie in the dairy and auto industries.
By keeping the salient points of NAFTA intact, globalist economies have a lot to cheer about.
Canada reportedly agreed to give U.S. dairy farmers access to about 3.5 percent of its estimated $16 billion annual domestic dairy market. Under USMCA, the Canadian government may recompense dairy farmers hurt by the deal.
Mexico agreed to provisions that would require that 40 to 45 percent of a car’s parts and assemblies be built in countries where laborers earn at least $16 an hour so carmakers can qualify for NAFTA’s duty-free benefits.
In a concession to Mexican and Canadian business, the new deal largely exempts passenger vehicles, pickup trucks and auto parts from possible Trump administration tariffs.
After a late-night Cabinet meeting to discuss the deal, Prime Minister Justin Trudeau told reporters, “It’s a good day for Canada”.
In a joint statement, Canada and the United States said it would “result in freer markets, fairer trade and robust economic growth in our region.”
The global financial markets are also in favor of the deal, mainly because it took out the prospect of an all-out trade war between the U.S. and two of its biggest trading partners.