Canada to flex legal muscle on tariffs following new trade agreement signing

Hugh Fox
December 2, 2018

Democratic Rep. Jan Schakowsky of IL, for one, said ahead of the signing that it does "not do almost enough to raise wages for workers, lower costs for healthcare consumers, or protect the environment", and that barring major changes, the deal "will result in more broken promises by Donald Trump to American workers".

The original three-nation North American Free Trade Agreement took effect in 1994, but Trump has vilified it as a bad deal that has fuelled a loss of US manufacturing jobs.

Trump ceremoniously signed the new agreement, called the U.S. Mexico Canada Agreement, in Buenos Aires this morning with Canada Prime Minister Justin Trudeau and Mexico's President Enrique Peña Nieto.

USMCA, which was finalized last month, replaces the North American Free Trade Agreement (NAFTA), which had been repeatedly criticized by Trump as being unfair to Americans and the country's industry.

Trump declared in a 5 a.m. tweet the "new name will be The United States Mexico Canada Agreement, or USMCA". The deal will also need approval of the House, which transfers to Democratic control in January.

The concession from Ottawa removed a major sticking point that Trump said was a deal breaker.

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United States objections to Canada's protected internal market for dairy products was a major challenge facing negotiators during the talks, and Trump repeatedly demanded concessions and accused Canada of hurting USA farmers.

Both changes are created to encourage more auto production in the United States in a reflection of U.S. President Donald Trump's "America First" mantra.

Both presidents addressed the tariff disputes they've had with Trump remarking that "battles sometimes make great friendships".

Three-way talks to renew NAFTA began in August 2017 and stalled a few times, leading the United States to negotiate the final details separately with Mexico and later with Canada.

But Philip Levy, senior fellow at the Chicago Council on Global Affairs and a trade official in Republican President George W. Bush's White House, says: "President Trump has seriously overhyped this agreement".

The three countries sealed the new trade accord a day before Trump is to meet with Chinese President Xi Jinping to discuss a possible truce in their tit-for-tat trade war.

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In an interview this week with Bloomberg, Toomey said that the USMCA is "frankly, not really as good as the underlying NAFTA".

Congress is likely to wait to vote on the deal until the United States International Trade Commission releases a report on the economic impact.

Friday marked an important deadline for the trade pact because a new Mexican president takes over Saturday who might not honour the tentative deal struck by his predecessor. He struck a more optimistic note on Friday, saying, "It's been so well-reviewed, I don't expect to have very much of a problem".

Foreign brand automakers have expressed concerns that the new rules of origin, which require more high-value content be produced in the United States or Canada, will be too burdensome.

However, the new deal does not resolve the punishing steel and aluminum tariffs imposed worldwide earlier this year, and on Mexico and Canada since May. "We've taken a lot of barbs and a little abuse and we got there", Trump said after the signing. Democratic Senator Elizabeth Warren said she would vote against the pact unless it is reopened to toughen labour and environmental standards, and does more to stop US companies from moving to Mexico.

On Thursday, as Trump was leaving Washington for Argentina, his former attorney and fixer, Michael D. Cohen, pleaded guilty to lying to Congress about that project, and implicated the president.

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