Canada's finance minister touts USMCA but says dairy, steel sectors need help

The Trump administration has muscled Canada into joining a revamped North American trade deal, sealed a pact with South Korea and coaxed a reluctant Japan into agreeing to one-on-one trade talks. Then came the Group of Seven Summit in June and an explosive rift between Trump and Trudeau.

Another reason why the talks failed, according to President Trump at least, was because, in the words of Mr. Trump, "because [Trudeau's] tariffs are too high and he doesn't seem to want to move - and I told him: 'Forget about it".

The clause in the new agreement - which still needs formal approval in all three countries - gives the other partners a say in the text of such a deal. Many said it could have been a lot worse.

Robert Carnell, head of research for the Asia-Pacific at ING, said the United States was acting like the European Union by not allowing members to go outside the group and set up their own free-trade deals.

But for Trump's America First trade policy, said Jacob Kirkegaard of the Peterson Institute for International Economics, the "returns are pretty paltry". "We have survived it".

In practice, this could mean the USA could tear up the USMCA if Canada or Mexico makes a deal with China that it does not like.

"Some of the most important changes have nothing to do with our relationship with Canada and Mexico, but with China, because they in their included language directly address our issues on intellectual property and ownership and a few other things with China", Hill said.

Trump, as well as American farmers, have always been furious about this, despite the fact that Canada imports far more American milk than the United States imports Canadian milk; the U.S. has a trade surplus of about $400 million in dairy. "We have lost so many jobs over the years under NAFTA". "India charges tariffs of 100 percent", Trump said. "We limited the damage and preserved our access to the American market".

Contrary to Mr. Trudeau's vague assurance that the article has very little effect, Canada is no longer free to pursue a free-trade agreement (FTA) with China under USMCA. The Trump administration's most contentious demands like its insistence that 50 percent of autos imports be American-made were dropped. And as negotiations dragged on, Trump threatened to slap Canada's auto industry with significant tariffs - a threat apparently now dodged.

However, the NDP said while auto tariffs are off the table, the Liberals have failed to get any assurance that the USA will lift aluminum and steel tariffs that impact the auto sector more than any other.

USA officials had held off giving in on either issue as they tried to squeeze further dairy concessions from Canada.

"The concessions were all from Canada and Mexico", MacKay said. "It's the complete opposite of what we have with the United States right now, so in that regard it's a good thing", he said.

Robert Bothwell, a professor at the University of Toronto, also said the US just reduced their initial demands. The deal really only formed on Sunday morning and was finished that night, the people said. The three still need to resolve the USA decision to impose "national security" tariffs on steel and aluminum from Canada and Mexico, which led those countries to impose retaliatory tariffs on billions of dollars' worth of United States farm and manufactured products. The deal was announced an hour before a deadline of midnight on September 30.

The National Association of Manufacturers declared, "Manufacturers are extremely encouraged that our call for a trilateral agreement between the United States, Canada and Mexico has been answered".

"There is no greater driving force in the North Country economy than our economic partnership with Canada", Gary F. Douglas, president of the North Country Chamber of Commerce, wrote in a statement. Fine - but the U.S., Canada and Mexico haven't done that, so it makes no difference.

Duncan Wood, director of the Mexican Institute at the Wilson Center think tank, said he doubts the new NAFTA will do much to reduce America's trade deficit with Mexico ($69 billion last year) or to shift investment bound for Mexico to the United States. That may pose a problem for Canada which is eager to diversify its trade.

Canadian sources close to the talks say MacNaughton's easygoing style and political acumen - honed as co-chair of multiple provincial and federal Liberal election campaigns, and former Ontario premier Dalton McGuinty's principal secretary - proved invaluable. "I have never seen anything like that in a trade agreement".

After more than a year of hard negotiations, the agreement - now including Mexico and Canada - will be sent to Congress Monday. "I hope the Chinese are listening", Kudlow said. "Japan and Europe, as well as the rest of the world, should be on notice that this may be the price of admission to a trade deal with the U.S".

"He´s a good man and he loves the people of Canada". Canada, for instance, will allow tax- and duty-free shipments worth up to 40 Canadian dollars (about $31), up from 20 Canadian dollars ($16) under NAFTA.

The Canadian, Mexican and USA governments ratified NAFTA in 1993.

Trump justified the moves by arguing that the imports posed a threat to USA national security.

INDIGENOUS RIGHTS: The Liberals pushed inclusion of a new chapter on Indigenous rights in the trade deal. And, at one point, Trump's trade adviser Peter Navarro said there was "a special place in hell" for Trudeau.

In the highly technical talks between the US and Canada, Kushner cultivated close ties with two of Trudeau's top aides, Katie Telford and Gerald Butts. "It has been traumatic".

"I don't think it's gotten enough play".

Critics of President Trump have once again been proved wrong.

"But this is nation to nation". Still, he added, "It's not radically different".

Vanessa Coleman

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