Renegotiations of NAFTA reached an agreement among the U.S., Mexico and Canada as an 11th hour deal was struck to include Canada in a new treaty. Dubbed the U.S. Mexico Canada Agreement (USMCA), it was announced late Sunday night and stakeholders in all three countries are touting its results.
The agreement gives the U.S. dairy industry greater access to Canadian markets and apparently did not address the Canadian lumber industry. The U.S and Mexico reached agreement in August but this weekend enough issues were agreed upon to make it a three way deal.
Among the many provisions is an agreement to nondiscrimination and transparency commitments regarding sale and distribution and labeling and certification provisions to avoid technical barriers to trade in wine and distilled spirits. It will also shield the automotive businesses of Canada and Mexico against the Trump administration’s plans to impose 25 percent on U.S. imports of automobiles and related parts, but will require new U.S. autos to be produced with 75 percent North American-origin content.
As this agreement is a treaty it requires approval of the federal legislative bodies in all three countries which leaves a degree of uncertainty as to when and if it will have final approval. President Trump has stated his intention is to sign the deal by the end of November.
In the meantime three way trade among the large North American countries has continued to rise even during this year's uncertain status of NAFTA at a pace of about $100 billion per month.
It is good to see that there may soon be peace on at least one front of the ongoing trade war. We will continue to monitor the Congressional approval process and keep you advised.