By Hanna Bogorowski
U.S. President Donald Trump came closer to fulfilling a campaign promise late Sunday night as he reached a revamped trade deal with Canada and Mexico that will rework the North American Free Trade Agreement (NAFTA) after months of negotiations.
Hours before Sunday’s midnight deadline proposed by the U.S., Canada agreed to sign on to the newly named United States-Mexico-Canada Agreement, or USMCA, which will give the U.S. greater access to Canada’s dairy markets as well as require a larger percentage of cars to be manufactured in North America.
The deal will also include increased protections for workers in the U.S. and Canada.
“Mexico and Canada have agreed to strong new labor protections, environmental protections and new protections for intellectual property,” Trump said at a press conference Monday. “This new deal is an especially great victory for our farmers.”
“For example, we [will] require a large portion of every car to be made by high-wage workers, which will greatly reduce foreign outsourcing which was tremendous problem,” he said. “More automobiles and parts will be manufactured inside the United States. We will be manufacturing many more cars and our companies won’t be leaving the United States, firing their workers and building their cars elsewhere.”
“It is a great deal for all three countries,” Trump wrote on Twitter.
Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico. The new name will be The United States Mexico Canada Agreement, or USMCA. It is a great deal for all three countries, solves the many……
— Donald J. Trump (@realDonaldTrump) October 1, 2018
The Trump administration notified Congress in August that it planned to sign a pact, which Trump and his Mexico-Canada counterparts plan to sign in late November, Politico reports, and Congress will make a formal vote in 2019.
“It 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,” U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said in a joint statement.
A good day for Canada & our closest trading partners. More tomorrow… https://t.co/qOowhvYW2B
— Justin Trudeau (@JustinTrudeau) October 1, 2018
Trump advisers reportedly said the changes the coalition has agreed upon will succeed in addressing U.S. concerns with the original NAFTA pact and will reduce incentives for U.S. companies to push business production to Mexico, in turn boosting production on American soil, according to The Wall Street Journal.
“This is the template for the new Trump administration playbook for future trade deals,” a senior administration official told reporters Sunday night.
While the accord signals an initial act of cooperation among Trump, Trudeau and outgoing Mexican President Enrique Pena Nieto, critics say the new provisions could actually impose greater regulatory burdens on North American businesses.
Pena Nieto has been eager to sign the deal before Dec. 1, when his successor, Andrés Manuel López Obrador, takes over.
A few of the details in the pact involve opening up Canada’s dairy market to U.S. exports at a higher level than the Obama administration negotiated under the Trans-Pacific Partnership, a senior administration official told Politico.
Canada also reportedly agreed to eliminate a milk-ingredient pricing program that American farmers complained had reduced demand for their exports.
Trade ministers additionally negotiated a minimum fixed wage level for auto manufacturers.
While initial reactions from businesses, lobbyists and those in Washington have been positive, some hesitated to give full support until after the technical details are hammered out in the coming weeks.
“Fixing NAFTA means increasing the paychecks of American workers, delivering real, enforceable labor standards, ensuring fairness for American agriculture, and recognizing the connection between economic growth and environmental protections,” House Minority Leader Nancy Pelosi told Business Insider.
“Democrats will closely scrutinize the text of the Trump Administration’s NAFTA proposal, and look forward to further analyses and conversations with stakeholders.”
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