ibusinesslines.com October 23, 2018

Trump produces a new trade deal on his terms

06 October 2018, 03:39 | Kelvin Horton

Canada and US agree last-minute trade deal

Saskatchewan steel workers feel

The dairy concessions were made in the final hours of year-long negotiations to replace the North American Free Trade Agreement, which had been stuck on US President Donald Trump's insistence that Canada open its dairy market to US competition.

With a satisfied smile, the president said the new name had a "good ring to it", repeating U-S-M-C-A several times. Perrin Beatty, the president of the Canadian Chamber of Commerce, said his group was "delighted" by the apparent deal. Politically, this could ultimately put Democrats in a very tight spot, particularly if blue collar voters who pulled the lever for Trump in 2016 like what they're hearing from this new deal.

Josh Kallmer, executive vice president for policy at the Information Technology Industry Council, said the trade deal's provisions are important not so much because of business risks in Mexico or Canada, but because any trade agreement is "a powerful way to steer the conversation globally".

Morneau says that's slightly higher than the 3.25 per cent that was agreed to under another deal - the Comprehensive and Progressive Agreement for Trans Pacific Partnership - with 10 countries including Mexico, Japan and Australia.

Canada gave up some access to its dairy, egg and poultry industries but will keep its agricultural supply management system and avoid punishing auto tariffs under the new deal.

Canada has long held high tariffs on most dairy products, leading to higher prices than in the U.S., while Trump has argued that the United States industry should be able to sell more products to its northern neighbour.

Trudeau said those were being negotiated on a separate track, and that the talks continue.

"We will be manufacturing many more cars", Trump said.

"Most Canadians blame the American administration for the mess we're in, and I think Justin Trudeau will be recognized for saving the furniture", he added.

Trump's mistreatment reinforces a worry among Canadians that their much larger neighbor is taking advantage of Canada, Heyman added.

In Ottawa, Trudeau hailed the agreement as "profoundly beneficial for our economy, for Canadian families and for the middle class".

Beijing has at times restricted data transfer across China's borders and required foreign companies to store data in China as a condition of doing business in the country - both measures that have hurt US tech companies, Kallmer said.

Trump, for his part, said the accord would return the United States to a "manufacturing powerhouse". Since being implemented, the agreement has come under criticism for making it easier to export U.S.jobs to the other two countries.

Speaking to reporters in Ottawa, Trudeau says the revamped NAFTA deal - renamed the United States-Mexico-Canada Agreement - is successful in maintaining fairness and balance between Canada and the USA, a trading partner 10 times its size.

Trump threatened to go ahead with a revamped NAFTA, with or without Canada. The administration, as well as officials from Canada and Mexico, should be applauded for months of hard work aimed at modernising NAFTA for the 21st century - a goal retailers have shared from the start.

Mexico had previously given the green light to a preliminary agreement with the USA that could replace NAFTA.

The two conceded Canada had been forced to scale back a highly restrictive supply management system created to effectively shield Canadian dairy farmers from US competition, but said Ottawa was determined to "fully and fairly" compensate Canadian farmers for the loss of market share. "We are pleased a deal has been reached that preserves NAFTA's trilateral framework, which is critical to protecting North American supply chains that support millions of American jobs".

Trump had set a deadline of Sunday to get Canada to agree to a deal, after the United States reached an earlier bilateral agreement with Mexico, with potential to exclude Canada from NAFTA. But Trump and other critics said it encouraged manufacturers to move south of the border to take advantage of low-wage Mexican wages.

"It takes a cloud and lifts it off the Canadian economy", said Bruce Heyman, the former USA ambassador to Canada. Mexico's incoming foreign relations secretary, Marcelo Ebrard, said some new regulations may pose challenges for companies to adapt to.

The second moment when she knew a deal was likely, Freeland said, came in August when she went back to Washington "and it was clear that the vehicle deal had been concluded by the Mexicans and also that the Americans really wanted us to be a part of it".

It's no friendly takeover that Canadians would fear in 2018 from Trump, to say the least.

The North American trade war is over! According to Bob Woodward's book "Fear: Trump in the White House", Trump was on the verge of pulling out of NAFTA in April 2017, and had to be talked back from the brink by senior aides. "I just don't think it gets wiped away and resolved with an agreement in principle on the trade agreement".

The stock market appears to like the new trade agreement between the United States, Canada and Mexico.

Like many other Canadians, Rosen feels Canada hasn't been treated with respect, referring to the personal attacks and steel exports that are still subject to US tariffs over what Trump calls national security concerns.

Other trading partners had been tough on the United States, he said, including the European Union, which introduced retaliatory tariffs on USA goods in June.

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