USMCA (formerly known as NAFTA)

Written by  //  October 6, 2018  //  Canada, Trade & Tariffs, U.S.  //  1 Comment

NAFTA Negotiations 2017-2018
AP fact check: New trade deal not as big as Trump claims

6 October
Having to inform U.S. about possible future trade deals a ‘practical reality’: Morneau
(CTV) Signing on to an article in the new USMCA that requires Canada to consult the agreement’s other signatories when it embarks on a new trade deal with a “non-market” country is the “practical reality” in the business world, says Finance Minister Bill Morneau.
“In the previous agreement of course, the United States had the ability to leave NAFTA on six months’ notice, in the new agreement they have the ability to leave if they don’t like what we’re doing with China, we’re just going to be practical in dealing with this.”
He said that having this new wording in the deal “changes absolutely nothing,” and downplayed the concern voiced by some trade experts.
Seeking to dispel concern over this aspect of the deal in the days following it being announced, Prime Minister Justin Trudeau said Canada still intends to further trade talks with China. Canada has moved towards formally engaging China in free-trade talks, though they stalled late last year, with little movement since. Meanwhile, Trump has engaged China in a trade war, with indications that it’s set to ramp up now that NAFTA talks have wrapped.
If the federal government is serious about following through on a Canada-China trade deal, now’s the time to follow through and prove that the clause is meaningless, said former Canadian ambassador to the U.S. Derek Burney on CTV’s Question Period.

3 October

John Geddes of Maclean’s gives the most comprehensive account of the NAFTA negotiations to date.
How NAFTA was saved: The bitter fight and the final breakthrough
It started with a demand from Donald Trump and seemed like a zero-sum game. John Geddes on the long, divisive fight and the last minute deal.

Geoffrey Gertz: 5 things to know about USMCA, the new NAFTA
(Brookings) 1. Overall, the changes from the old NAFTA are mostly cosmetic. 2. The most revealing change might be the agreement’s new name. 3. The Trump administration got at least part of what it wanted.
4. While this might be a (modest) short-term victory for the U.S., it risks undermining America’s long-term interests….  Since Trump’s election, a number of U.S. allies have already taken steps to balance against U.S. power, and diversify their interests away from America. The U.S. approach to NAFTA’s renegotiation should only accelerate this trend. In other words, the important question was never whether the U.S. could shake down its trade partners to extract some modest gains, but rather whether it should.
5. There’s still a long way to go until USMCA becomes law. … The difficult step will be ratifying the agreement, which in the U.S. will mean a vote sometime in the next Congress. Clearly, how such votes proceed will be significantly influenced by this fall’s midterm elections. Yet whatever happens, there are reasons why both Republicans and Democrats may be reluctant to approve the deal. … (Of course, for their part, neither Canada nor Mexico will likely protest too strenuously if the U.S. fails to ratify the new pact, so long as it allows them to keep the existing NAFTA.)

Canada, U.S. have reached a NAFTA deal — now called the USMCA
Trudeau says it’s ‘a good day for Canada,’ but does not elaborate
Prime Minister of Canada welcomes new United States-Mexico-Canada Agreement
(Canadian Government) “The agreement-in-principle we reached today is good for Canada, good for Canadian businesses, and most importantly, good for Canadian workers and their families. When this improved agreement is implemented, North American trade will be preserved and modernized for the 21st century – just as we set out to do.”

Very complete coverage from CTV News:
Trudeau, Freeland herald USMCA as trilateral victory
The federal government is heralding the historic new USMCA trade pact between Canada, the United States, and Mexico as a good deal for all three countries, describing the new agreement in principle as a preservation of many aspects of the original NAFTA, that also stabilizes and modernizes the trade relationship for the realities of the times.
Prime Minister Justin Trudeau was joined by Foreign Affairs Minister Chrystia Freeland, who led the Canadian team of negotiators throughout the often intense and sometimes dramatic talks, that ended with a varying degree of concessions and changes to the trade rules between the three countries.

Astonishing’ clause in new deal suggests Trump wants leverage over Canada-China trade talks: experts
The USMCA includes language that requires signatories to give notice if they plan to negotiate a free trade deal with a ‘non-market country’
(National Post)… the USMCA includes language that requires signatories to give notice if they plan to negotiate a free trade deal with a “non-market country,” and to allow the other two signatories at least a month to review any agreement before it is signed. It explicitly states that if one of the signatories enters into such an agreement, the other two have the right to withdraw from the USMCA with six months’ notice.

USMCA: A trade deal that does no harm, but breaks no ground
Kevin Carmichael: Trudeau and Chrystia Freeland achieved none of the things they identified as Canadian goals with the new pact

Buried behind the cows and cars: key changes in NAFTA 2.0
Higher drug prices, longer copyright terms, no reprieve on Buy America in new USMCA

30 September (10:13pm)

New NAFTA deal reached: Canada, U.S., Mexico finalize trade agreement, sources confirm

(Global news) A midnight deadline was beat (sic) with agreements to boost U.S. access to Canada’s dairy market and protect Canada from possible U.S. autos tariffs, two Canadian sources with direct knowledge of the talks said Sunday.
Reports say that Canada has made concessions on dairy market access that are slightly higher than under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Chapter 19, the dispute resolution mechanism, will be kept.
Word of the deal came as Prime Minister Justin Trudeau convened a 10 p.m. cabinet meeting to discuss NAFTA.
WaPost: Canada agrees to join trade accord with U.S. and Mexico, sending new NAFTA deal to Congress
(Reuters) – The United States and Canada forged a last-gasp deal on Sunday to salvage NAFTA as a trilateral pact with Mexico, rescuing a three-country, $1.2 trillion open-trade zone that had been about to collapse after nearly a quarter century. Since talks began more than a year ago, it was clear Canada and Mexico would have to make concessions in the face of Trump’s threats to tear up NAFTA and relief was palpable in both countries on Sunday that the deal was largely intact and had not fractured supply chains between weaker bilateral agreements.

One Comment on "USMCA (formerly known as NAFTA)"

  1. Diana Thebaud Nicholson October 3, 2018 at 4:18 pm · Reply

    Jeremy Kinsman comments: I see no case for disappointment. It was inconceivable we would give less on dairy than conceded in TPP and, more importantly, CETA. We gave up a bit more than 3% of the protected dairy market. Trudeau managed to keep supply management as a concept and operating system. I and many others, eg John Manley, see it as an anachronistic system – of course, the TV news is headlining what we gave up on dairy – it’s conflict, so it’s news. But it’s a small part of the story. Plus, Canadian consumers?
    Culture was probably a red herring. The exception remains intact.
    The IP provisions were very typically negotiable, as were copyright.
    The big issue is the tariffs. Without a US commitment to end the extortion of unilateral tariffs on fraudulent grounds of “national security” there won’t be a Canadian signature.
    The Trudeau team did very, very well. Scheer got it mostly wrong, as you’ll see in the polls, though I guess he has to oppose – it’s his job. Mulroney’s statement is much more accurate.
    The bigger world issue is the way the US huffed and bluffed and in the end got stared down. Is that what will happen elsewhere, or did it happen here because they realized they couldn’t handle a deep conflict with Canada at the same time as a trade war with China?

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