Official says basis of Canada-US deal reached

Official says basis of Canada-US deal reached

Official says basis of Canada-US deal reached

After a highly elongated, turbulent negotiation process, Canada has reached a tentative deal with the United States and Mexico to continue the 24-year-old North American Free Trade Agreement (NAFTA).

President Donald Trump is embroiled in a trade dispute with China that has seen the US impose tariffs on hundreds of billions of dollars worth of Chinese goods, prompting Beijing to retaliate.

A protectionist policy under the Mr Trump has seen the U.S. forge ahead with individual trade deals, rejecting bigger multi-lateral trade agreements and posing a challenge to decades of global free trade. Fortunately, many programs funded by the farm bill, including crop insurance, still have secure funding until the end of this year.

Central and northern New York's Republican congressional members are singing praises for the newly renegotiated NAFTA deal.

"The agricultural community is counting on our elected leaders to ensure that a safety net remains in place during these uncertain times".

But experts say Canada has now chosen Trump and dumped China.

In late May, the Trump administration announced tariffs of 25 percent on steel imports and 10 percent on aluminum imports, prompting quick retaliation from top trading partners including Canada and Mexico.

Dr. Andrew Solocha, professor of International Finance at the University of Toledo says, "If they impose a tariff on cars like Trump has proposed, that will mean they have to build their cars here". However, the deal is expected to contain key provisions on Canada's dairy industry and auto exports to the US.

Trump threatened to go ahead with a bilateral deal with Mexico, but Mexican officials strongly advocated for Canada's inclusion.

You could say it's a glass half full situation for US farmers.

The agreement includes a quota on automobile shipments to the US and a greater level of access to Canada's dairy market.

This was with the goal of keeping the production of vehicle parts in the U.S. and help bring back some that had moved overseas.

"We are sending China a message, and I hope they are listening".

"In the coming days, I will closely review the text of this proposal to see whether the proposed changes, on balance, enhance or weaken the enormous economic benefit we have derived from the original agreement".

USMCA doesn't trip off the tongue like NAFTA, but that didn't stop Justin Trudeau's cabinet signing the deal off shortly before midnight in Washington, to avoid trade relations with the USA being poisoned.

Industry Week noted: "This provision is an incentive for automotive manufacturers to produce more goods in the United States, given its higher labor costs than those in Mexico".

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