With NAFTA sorted, focus shifts to aluminum and steel tariffs

Canadian Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland THE CANADIAN PRESS  Adrian Wyld

Canadian Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland THE CANADIAN PRESS Adrian Wyld

In a joint statement, United States and Canadian trade representatives said the agreement "will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region".

"Certainly disappointed because they didn't agree on a solution on the 232 sanctions regarding aluminum and steel", said Jean Simard, CEO of the Aluminium Association of Canada.

All in all, the new NAFTA is definitely a modern and updated version of its important predecessor, which the U.S. Department of Agriculture characterized as one of the most successful trade agreements in history.

The deal, reached late Sunday, will govern $1.2 trillion United States in trade, making it the biggest agreement in the country's history, and marks the end of an era during which the USA has been "treated so badly" on trade by other countries around the world, the president said.

It was unclear, however, whether Trump had authority from Congress to pursue a revamped NAFTA with only Mexico, and some lawmakers said they wouldn't go along with a deal that left out Canada.

"In short, we think this is a fantastic agreement for the USA, but also for Canada and Mexico", said the American officials, who cheered the fact that USA dairy ranchers would soon have "substantial" expanded access to lucrative markets north of the border.

Chapter 19, which the USA had wanted eliminated and was a significant sticking point for Canada, remains in full. Chapter 19 is the dispute settlement mechanism that allows countries to seek remedies for breaking the rules.

"Cars are made from steel and aluminum, and so the ecosystems that support them that are in Southwestern Ontario and across Canada can not thrive under these tariffs that we now have", she said.

Other contentious, so-called USA poison pills - which would have limited Canada and Mexico's ability to bid on lucrative US procurement projects - are gone.

Ratifying the deal is likely to stretch into 2019 because once Trump and the leaders from Canada and Mexico sign the agreement, the administration and congressional leaders will need to write legislation to implement the deal and win passage in Congress.

The chairman of the New Brunswick dairy farmer says he woke up this morning with a pit in his stomach.

In the end, Canada is keeping most of its complex system in place, but it is giving greater market share to USA dairy farmers. Under Canada's supply-managed dairy system, Ottawa effectively sets production quotas and the price of milk, which raises prices to consumers but provides farmers with a stable income.

Bothwell Cheese executive vice president Wally Smith says he is concerned about what increased market access will look like. "With #USMCA, we have a new name, but a worse deal", Singh said in a tweet. They suspected Canada, which had said it wasn't bound by USA deadlines, was delaying the talks until after provincial elections Monday in Quebec, where support for Canadian dairy tariffs runs high. It offers Canada protection if Trump goes ahead with plans to impose tariffs on cars, trucks and auto parts imported into the United States. Dairy Farmers objected to this, too, but the once-obscure dairy classification had become a lightning rod of discontent for Trump.

Meanwhile, the president said he would continue to employ tariffs on other countries only in instances where the governments are "absolutely not willing to do what's fair and reciprocal".

"Close. Not done yet", said one Canadian official close to the talks who spoke on the condition of anonymity to discuss confidential deliberations.

Just a few days ago Trump attacked Canadian Prime Minister Justin Trudeau and his negotiating team, and had demanded major changes to NAFTA. Under the new agreement, three-quarters of a car's parts must originate from North America in order to be exempt from duties.

Officials reached the US-Mexico-Canada Agreement after a year of negotiations Sunday.

Asked at a press conference in Ottawa Monday how much influence the clause would give the USA over potential free-trade negotiations between Canada and China, Prime Minister Justin Trudeau did not answer directly.

Negotiations between Washington and Beijing remain deadlocked after the Trump administration followed through with another round of import taxes on Chinese goods last month, leading to retaliatory tariffs and the cancellation of high-level trade talks.

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