Published: Mon, December 03, 2018
World News | By Sandy Lane

US, Canada, Mexico sign trade deal after last-minute brinkmanship

US, Canada, Mexico sign trade deal after last-minute brinkmanship

But there are battles ahead with lawmakers before what Trump calls the "USMCA" - short for U.S. -Mexico-Canada Agreement - will formally replace NAFTA.

Separately, a smaller group of Republican senators even tried to convince the White House to hit the gas pedal on ratification efforts, fearful that the new influx of Democrats in the new year would render congressional approval of the deal "significantly more hard".

Though trade deals are usually subject to an up-or-down vote with no amendments, Congress still would have to pass legislation to implement the agreement.

After much anticipation, Canada signed the revamped NAFTA in Buenos Aires today on the sidelines of the high-profile G20 summit.

The deal - 32 chapters, 11 annexes and 12 side letters - sets new rules for the auto sector, including a higher threshold for North American content and rules requiring that 40 per cent of vehicle parts be made by workers paid at least $16 an hour.

President Donald Trump Canada’s Prime Minister Justin Trudeau right and Mexico’s President Enrique Pena Neto left participate in the USMCA signing ceremony Friday Nov. 30 2018 in Buenos Aires Argentina

"There's some good signs", Trump said. "You don't see that happen very often".

For the new North American trade deal, legislative approval is the next step.

Democrats in January will take control of the House, where the agreement is expected to have a more hard path.

Within hours of the signing, Senate Democratic Leader Chuck Schumer said the deal must have stronger labor and environmental protections in order to get majority support in Congress and "must prove to be a net benefit to middle-class families and working people".

Rep. Nancy Pelosi, who Democrats have nominated for House speaker next year, called the deal a "work in progress" on Friday. "It's been so well-reviewed, I don't expect to have much of a problem".

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Trump is describing USMCA as a landmark trade agreement. The deal eliminates Canada's unfair Class 6 and Class 7 milk pricing schemes, opens additional access to US dairy into Canada, and imposes new disciplines on Canada's supply management system. During the negotiations, Trump repeatedly threatened to pull out, a move that would have disrupted businesses that have built complicated supply chains that straddle the borders of the three countries. He can decide to lift them without making changes to the USMCA.

In Canada, where the agreement has been met with skepticism by dairy farmers and others, Parliament is unlikely to take up the pact until after it is ratified by the U.S. Congress.

The modernized agreement preserves Canada's "preferential" access to the United States and Mexican markets, ensuring that the majority of trilateral trade remains duty-free.

The biggest changes target the auto industry. The side letters also include deals between the United States and Mexico on biologic drugs, cheese names and auto safety standards; and deals between the United States and Canada on wine, water and energy.

'There is still a ways to go to gain support in the new Congress for this agreement, ' said representative Bill Pascrell, the top Democrat on the House Ways and Means trade subcommittee.

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Meanwhile, a number of lawmakers and business groups are trying to push for the removal of USA tariffs on steel and aluminum imports from Canada and Mexico, which have inflicted harm upon American manufacturers and consumers, raising costs for a wide array of industries. Trudeau also referenced recent downsizing by General Motors in North America as a "heavy blow".

Trump acknowledged that Friday was Pena Nieto's last day in office and congratulated him on the achievement of signing on to the deal. Before Trump arrived in Argentina he injected additional drama into the proceedings by canceling another high-stakes meeting, with Russian President Vladimir Putin.

One looming question is whether Trump will have a run-in with Saudi Arabian Crown Prince Mohammed bin Salman amid global dismay over the murder of Saudi journalist Jamal Khashoggi.

But the path to Friday's signing has been bruising, and those sore spots will be impossible to ignore when the three countries' leaders gather to talk trade for the first time since 13 months of talks culminated in an 11th-hour agreement late in September.

The president campaigned in 2016 on negotiating a new deal with Canada and Mexico, charging that the countries took advantage of the United States under NAFTA. The official spoke on condition of anonymity due to the sensitive nature of the crown prince's situation.

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