Trade deal with Canada 'new dawn' for auto industry

Jermaine Castillo
October 2, 2018

Under the terms of the new deal, the trade dispute mechanism Canada had sought to preserve will be maintained.

Canada, the United States' No. 2 trading partner, was left out when the USA and Mexico reached an agreement last month to revamp the North American Free Trade Agreement.

New measures will prevent Canada's system from spilling outside its borders, while market access for the USA will exceed Canada's concessions in Trans-Pacific Partnership talks, the US official said.

If you frequently shop down in the U.S., you'll likely be welcoming the new U.S. -Mexico-Canada Agreement.

NAFTA had three kinds of dispute settlement systems. In August past year, he started a review of the trade pact with Mexico and Canada that opened up negotiations.

However, she says the amount and type of compensation will be worked out in coming months while Canada, the USA and Mexico all work to ratify the agreement reached late Sunday.

"It's a good night for Mexico, and for North America", Mexican Foreign Secretary Luis Videgaray said.

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The administration officials told CBS News they expected it to be signed by Mr. Trump and his Canadian and Mexican counterparts on November 30, then submitted to Congress, with a vote expected some time next year.

A side letter published along with the main text of the agreement exempts a percentage of eligible auto exports from the tariffs. A similar agreement between Mexico and the US preserves duty-free access to the USA market for vehicles that comply with the agreement's rules of origin.

To qualify for zero tariffs a auto or truck must have 75 per cent of its components manufactured in Canada, Mexico or the United States, which is a boost from the current requirement of 62.5 per cent. The two US neighbors account for a combined one third of USA food and agriculture exports and imports.

"It makes it very, very hard when everybody wants you to make your food for nothing", Gaunce said. This is slightly above the 3.25% market access Canada would have given the United States as part of the Trans-Pacific Partnership, which Trump pulled the USA out of previous year. Under the agreement, 75 percent of every automobile must be built in North America. "The practical consequences are limited, if any". The official was not authorized to speak publicly and requested anonymity.

USMCA is said by analysts to be similar to NAFTA in many respects but there is improved access for United States agricultural goods, including the dairy products which Canada in particular had tried to limit.

"This administration is committed to strong and effective enforcement of this agreement, just like all of our other agreements. The U.S. can damage Canada without hurting themselves very badly".

Trudeau arrived at his office Sunday night but did not comment as he walked by reporters ahead of the unusual late meeting with his ministers.

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On dairy the official said Canada essentially gave the US the same access it offered in the Trans Pacific Partnership trade agreement that President Donald Trump rejected.

He said the new deal treats American workers with "fairness and reciprocity", unlike NAFTA, which he again described as the worst deal ever agreed to by the United States.

"It's a great win for the president and a validation of his strategy in the area of global trade".

Trump said the tariffs would remain in place "until such time as we can do something that would be different, like quotas perhaps, so that our industry is protected".

President Trump has long threatened to pull the United States from NAFTA.

The Canadian Chamber of Commerce said it was relieved that an agreement in principle had been reached. But chamber president Perrin Beatty said the details of the text needed a closer look before a final verdict could be rendered. That is more than the 2 million units now exported.

"I promised to renegotiate NAFTA", Trump said in the White House Rose Garden Monday.

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