Pulp and Paper Canada

The new NAFTA: Canada inks USMCA deal with U.S & Mexico

October 1, 2018  By P&PC Staff

October 1, 2018 – After 14 months of negotiations, Canada has signed a new deal with the United States and Mexico that eliminates the North American Free Trade Agreement (NAFTA) and ushers in the new U.S.-Mexico-Canada Agreement (USMCA).

The deal was inked just hours before Sunday’s midnight deadline, which the U.S. had imposed in an effort to speed up talks with Canada to get the deal in front of Congress before Dec. 1. The U.S. and Mexico had already reached a deal earlier this summer.

The Canadian Press is reporting that the new agreement includes more access to the Canadian dairy market for U.S. producers, and strengthens the U.S.’s position in terms of Canada’s supply management system for dairy and poultry products.


In terms of wins for Canada, the new deal retains Chapters 19 and 20 from NAFTA, both of which pertain to dispute settlements involving governments.

In a joint statement, Canadian Foreign Affairs Minister Chrystia Freeland and United States Trade Representative Robert Lighthizer said, “USMCA 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. It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home. We look forward to further deepening our close economic ties when this new agreement enters into force. We would like to thank Mexican Economy Secretary Ildefonso Guajardo for his close collaboration over the past 13 months.”

The U.S. has indicated that an understanding has been reached with regard to the Section 232 tariffs, which have allowed U.S. President Donald Trump to adjust the import of foreign goods he deems a threat to national security. No other details are yet available on the tariffs, other than the fact that the steel and aluminum tariffs currently remain in effect.

There will also be a percentage of eligible automotive exports exempted from tariffs. There will be a cap on duty-free auto exports sent to the U.S., but it is well above what Canada already sends.

Prime Minister Justin Trudeau called it a “great day for Canada,” and plans to hold a press conference today at noon.

Following the deal, Trump tweeted, “It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world.”

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