• Wednesday, Jan 20, 2021
  • Last Update : 10:47 pm

USMCA replaces Nafta, Trump calls it a ‘wonderful' and ‘a historic transaction’

  • Published at 10:17 pm October 1st, 2018
US President Donald Trump welcomes Canada's Prime Minister Justin Trudeau on the South Lawn before their meeting about the Nafta trade agreement at the White House in Washington, US October 11, 2017 REUTERS

The new United States-Mexico-Canada Agreement (USMCA) is aimed at bringing more jobs into the United States, with Canada and Mexico accepting more restrictive commerce with the United States, their main export partner

President Donald Trump hailed Canada on Monday after the two countries forged a last-minute deal to salvage their trilateral Nafta accord with Mexico, marking a key victory in the US leader’s effort to shake up global trade. 

The deal, announced on Sunday, is a reworking of the 1994 North American Free Trade Agreement, which underpins $1.2 trillion in trade between the three countries. Trump had described Nafta as a bad deal for Americans and threatened to eliminate it as part of his “America First” agenda. 

The new United States-Mexico-Canada Agreement (USMCA) is aimed at bringing more jobs into the United States, with Canada and Mexico accepting more restrictive commerce with the United States, their main export partner.

While changing Nafta and bringing down US trade deficits was a top Trump campaign pledge, Sunday’s agreement largely leaves the broad deal intact and maintains current supply chains that would have been fractured under weaker bilateral deals.

Trump, who said he would hold a news conference at 11 am EDT (1500 GMT), Monday, on Twitter called the US agreement with its neighbor to the north “wonderful” and “a historic transaction.”

“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, reduce Trade Barriers to the US and will bring all three Great Nations closer together in competition with the rest of the world,” Trump wrote.

Canadian Prime Minister Justin Trudeau on Sunday called it “a good day for Canada” after negotiators worked frantically ahead of the US-imposed midnight deadline. He is scheduled to speak to reporters at noon EDT (1600 GMT).

The pact preserved a key trade dispute settlement mechanism sought by Canada even as Ottawa agreed to open up its dairy markets to US farmers. It will also make it harder for global auto makers to build cars cheaply in Mexico. 

Trump vowed during his 2016 presidential campaign to tear up current US trade deals, which he blamed for a loss of US manufacturing jobs. His administration has abandoned other trade accords and slapped tariffs on a number of key trading partners, particularly China.

“It’s a promise made, promise kept,” Peter Navarro, the White House trade adviser, told Fox News on Monday. “Nafta is dead. We have USMCA.”

The United States and Mexico clinched a bilateral agreement in late August. US officials intend to sign the new trilateral deal by Nov 30, Navarro said. 

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