President Trump and his team have negotiated a victory for American manufacturers and farmers in a new trade deal with Canada. The announcement comes after Canada ultimately gave in to demands by the Trump administration by a Sunday deadline of midnight.
The deal caps weeks of bitter, high-pressure negotiations that saw the president and Canadian Prime Minister Justin Trudeau’s relationship sink as Trump made public numerous unfair trade practices by Canada that had embarrassed the Canadian government over the summer. Trudeau’s popularity had slowly eroded, even in the face of some Canadians saying they would boycott American goods. The fact that Canada relies on the U.S. for a vast segment of its GDP made the Canadians blink and agree to a more fair trading arrangement with their southern neighbors.
In a joint statement, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said the agreement “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.”
The new deal, reached just before a midnight deadline imposed by the U.S., will be called the United States-Mexico-Canada Agreement, or USMCA. It replaces the 24-year-old North American Free Trade Agreement, which President Donald Trump and American unions had called a job-killing disaster
Trump on Monday morning called it a “great deal,” saying that it “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.”
He added: “Congratulations to Mexico and Canada!”
The agreement reached Sunday gives U.S. farmers greater access to the Canadian dairy market. “It’s a good day for Canada,” Prime Minister Justin Trudeau said as he left his office. Trudeau said he would have more to say Monday.
“We celebrate a trilateral deal. The door closes on trade fragmentation in the region,” Jesus Seade, trade negotiator for Mexico’s incoming president, said via Twitter.
Representatives for the government of Mexican president-elect Andres Manuel Lopez Obrador have called a press conference to discuss details of the trade deal on Monday.
Canada, the United States’ No. 2 trading partner, was left out when the U.S. and Mexico reached an agreement last month to revamp the North American Free Trade Agreement.
The Trump administration officially notified Congress of the U.S.-Mexico trade agreement on Aug. 31. That started a 90-day clock that would let outgoing Mexican President Enrique Pena Nieto sign the new pact before he leaves office Dec. 1.
Trump threatened to go ahead with a revamped NAFTA — with or without Canada. It was unclear, however, whether Trump had authority from Congress to pursue a revamped NAFTA with only Mexico.
Trump campaigned on a promise to rewrite NAFTA — or get rid of it. Talks on a rewrite began more than a year ago. To placate Trump, Mexico agreed in August to provisions that would require 40 percent to 45 percent of a car be built in countries where auto workers earn at least $16 an hour to qualify for NAFTA’s duty-free benefits.
It was surprising that the United States found it easier to cut a deal with Mexico than with Canada, a longtime ally with a high-wage economy similar to America’s. “When this got started, Canada was the teacher’s pet and Mexico was the problem child,” said Michael Camunez, president of Monarch Global Strategies and former U.S. Commerce Department official.