Nov. 30, 2018–The presidents of Canada, Mexico and the United States signed a new trade agreement governing trillions of dollars of North American trade.
Meeting in Buenos Aires, Argentina ahead of today’s G20 meeting, Canadian Prime Minister Justin Trudeau, U.S. President Donald Trump and Mexican President Enrique Pena Nieto signed the treaty. The legislatures each country still need to approve it before it takes effect.
NAFTA Becomes USMCA
The U.S.-Mexico-Canada Agreement succeeds the North American Free Trade Agreement.
USMCA covers agriculture, intellectual property, digital trade and financial services. It includes environmental safeguards against unregulated fishing and in trafficking in wildlife and timber and labor rights, such as worker representation in collective bargaining talks.
Analysts say the main significance is the deal removes uncertainty over NAFTA, which President Trump vowed to break.
In many ways the new treaty is a modern version of the old one.
Key Difference from NAFTA
USMCA requires Mexican auto manufacturing firms to pay at least 40 percent of their workers a wage of $16 an hour. It also increases the amount of auto manufacturing taking place in North America from 62.5 percent to 75 percent.
It allows U.S. farmers to sell dairy products in Canada.
Finally, it severely restricts a procedure allowing foreign investors to seek monetary damages from governments.
Details Pending?
Although most details were settled Sept. 30, some specifics remained unclear even as the leaders signed off. Negotiators reportedly disputed the finer details of the pact up to the last minute.
According to Canada’s National Post, “Brinkmanship over the final details of the deal continued through the eve of the signing. It was unclear what exactly the three countries have signed.”
U.S. negotiators reportedly pushed changes onto the Sept. 30 agreement, David Ljunggren with Reuters reported. The disagreements involved wording relating to sales of wine and dairy in Canada.
The U.S. Trade Representative had removed a link to the text of the agreement from its web site. Meanwhile, the Canadian government has an outline with links to the text posted by the Canadian government.
Canada reportedly had reservations about the deal, including the part that allows U.S. dairy farmers to sell its goods in Canada. President Trudeau said the new agreement reduces uncertainty and modernizes the governance of trade among the countries.
“The new North American free trade agreement maintains stability for Canada’s entire economy,” Trudeau said. “The new agreement lifts the risk of serious economic uncertainty that lingers throughout a trade renegotiation process.”
