U.S. And Canada Reach Deal To Replace NAFTA

Donald Trump declared the United States-Mexico-Canada Agreement (USMCA) - the new name for the world's second-biggest economic bloc behind the European Union - a "wonderful new trade deal", which came through an 11th-hour agreement late on Sunday.

Following years of threats from Trump and the promise of establishing a new deal more favorable to the USA, the latest agreement appears to represent a win for the White House. "It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the almost half billion people who call North America home".

His feelings match those of the Dairy Farmers of Canada, who says similar trade deals like Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP) have hampered their role in Canada's milk market.

The US and Mexico were pushing to get the new deal through their legislatures before Mexican President-elect Andres Manuel Lopez Obrador takes office on December 1.

He said he hopes the aluminum and steel tariffs can be resolved shortly, but that the manufacturing industry didn't lose on what's in the new deal.

Canada has agreed to provide USA dairy farmers access to about 3.5 percent of its approximately $16 billion annual domestic dairy market.

On the flip side of Canada's more open dairy market, the country's own farmers may be negatively affected.

"It's a good day for Canada", was all Prime Minister Justin Trudeau would say as he left a late-night cabinet meeting in Ottawa that capped several days of frenetic long-distance talks that included Foreign Affairs Minister Chrystia Freeland and U.S. Ambassador David MacNaughton. Trump threatened to go ahead with a bilateral deal with Mexico, but Mexican officials strongly advocated for Canada's inclusion.

The pact, underpinning $1.2 trillion in annual trade, is based on "fairness and reciprocity", according to Trump, who added that it was reached after disagreements with his counterparts in Mexico City and Ottawa, Enrique Pena Nieto and Justin Trudeau.

"Things started to change when the United States understood that we weren't moving on the dispute mechanism, Canada's cultural exemption needed to be in place, we weren't going to bend on the auto industry", he said today on Parliament Hill. Canada has a complex milk and dairy system.

The question of how to deal with the hefty tariffs that Trump imposed on Canadian steel and aluminum earlier this year is still being discussed, the Canadian official said.

The US appears to be willing to give up demands to drop independent dispute resolution panels if it can have greater access to the Canadian dairy market.

"People said that it would be bad to elect a bully as president, but now, America is literally taking Canada's milk money, so I guess it worked. The door closes on trade fragmentation in the region", Jesus Seade, trade negotiator for Mexico's incoming president, said via Twitter.

Officials reached the US-Mexico-Canada Agreement after a year of negotiations Sunday.

"The cost of medication is going to go up because we gave into big pharma in the USA on patents", Ramsey warned, referring to the extension given to the length of time new drugs will spend on the market before facing off with generic competitors.

That's significantly more than the 1.8 million vehicles Canada typically sends to the USA each year, making it unlikely that auto tariffs are ever likely to come to pass under the terms of the agreement, trade experts say. Dairy Farmers objected to this, too, but the once-obscure dairy classification had become a lightning rod of discontent for Trump.

"We know full well the American administration targeted the complete scrapping of supply management and what we did with this agreement was to protect supply management for future generations because it is a system that works", Trudeau said. US administration officials, speaking on the condition of anonymity, said Sunday night that this was a win for farmers in Wisconsin, New York and elsewhere.

Canada was brought back into the fold after weeks of negotiations, with a deal announced shortly before a midnight deadline.

A side letter published along with the main text of the agreement exempts a percentage of eligible auto exports from tariffs.

Stock markets rallied on Monday as news of the agreement spread.

Negotiators worked frantically ahead of a midnight US -imposed deadline to settle differences, with both sides making concessions to seal the deal.

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