Canada trade deal may mean higher auto prices

In the end, Canada and the USA overcame their differences after both sides conceded some ground, hailing an agreement that covers a region of 500 million residents and conducts about $1 trillion in trade a year.

“If the United States were to strike new deals with its major trading partners, many of which are also key trading partners of China, Beijing could feel increasingly cornered”, said Eswar Prasad, a former China expert at the International Monetary Fund who now teaches at Cornell University.

The government found support from Canada’s chief negotiator of the original North American Free Trade Agreement, who said an unusual clause covering future free trade with “non-market” countries did not infringe Canadian sovereignty.

U.S. President Donald Trump is taking a victory lap at the White House, cheering Sunday’s last-minute free trade deal and pronouncing the death of the 25-year-old North American Free Trade Agreement.

Mister Trump insisted his new trade deal with transform North America into a manufacturing powerhouse. It also comes ahead of the U.S. midterm elections next month, which could be challenging for the president.

The new deal covered trade between the three countries worth $1.2bn and was “truly historic”, he said.

Dairy Farmers of Canada, however, issued a terse statement saying the deal will have “a dramatic impact not only for dairy farmers but for the whole sector”.

Under the USMCA, many food and ag exports from the US will continue to have duty-free entry to Canada and Mexico, as they do under NAFTA.

Speaking on October 1 in the White House Rose Garden, President Trump, per a report by The Hill, affirmed plans to sign off on the deal by the end of next month.

Meanwhile, a University of Kansas law professor who specializes in global trade law called it a significant improvement over the original NAFTA, although not as significant as the broader Trans-Pacific Partnership, which included 11 additional countries, but which President Donald Trump withdrew from early in his administration.

As for what led the U.S. Chicken, eggs, turkeys and American wheat are also headed north in greater volumes.

“The milk part of this agreement is a huge win for the United States dairy farmer”, Maxwell said. Canada will be allowed to export as many as 2.6 million autos before any USA tariffs on foreign cars kick in – effectively an exemption. “Trucks move almost $385 billion in goods between the USA and Mexico, and $336 billion in trade across the Canadian border- continuing to have free trade between our three countries will only help our industry well into the future”.

Trump called dairy the “deal breaker” for him in the negotiations. The agreement carves out quotas for both nations to export vehicles and parts to the US duty-free.

Most critical of the deal was the dairy industry, which railed against expanded USA access to the domestic dairy market and the elimination of competitive dairy classes.

President Barack Obama negotiated TPP – a 12-party pact that included Canada and Mexico – as part of his own promise to “renegotiate NAFTA”. “We think the Americans have got lots of access to the BC market and do quite well thank you very much”, Prodan says. However, the USMCA clause does not rely on WTO definitions – the way it is worded, if the U.S., Canada or Mexico “determines” a country isn’t a market economy, then for the purposes of the clause, it isn’t.

“If you’re on the list, its survival is very good news for you”, said Eric Miller, a trade consultant who has worked for the Canadian government and continues to advise them on the negotiations.

“The bar for supporting a new NAFTA will be high”, Rep. Richard Neal, the ranking member on the House Ways and Means Committee, told reporters Monday. “Because that’s what the Clinton administration did back in 1994, when they went on “Larry King” touting NAFTA and we all thought it was going to create many jobs, raise our incomes, stop illegal immigration and narcotics trafficking, and Mexico would become a developed country within a few years”. The feds said Monday that the two countries are still negotiating for their eventual removal, but that doesn’t exactly constitute good news for an industry that could use some.

The rarely expressed sentiment from Trump was reasonable – Congress might well not vote to ratify the agreement. USA wheat groups have complained that Canada now classifies their grain as lower-value, feed-quality wheat.

But Chuck Bradford, a steel industry analyst based in NY said he believes the USMCA is an “encouraging sign” for what’s to come.