Canada, buoyed by trade deal, to push USA on metal tariffs

NAFTA talks

NAFTA talks

Canada, the United States' No. 2 trading partner, was left out when the US and Mexico reached an agreement last month to revamp the North American Free Trade Agreement.

They say the newly-named United States-Mexico-Canada Agreement, or USMCA, will result in freer markets and fairer trade.

Canada was adamant about getting the "right-deal", meaning agreement could not be reached by 31 August, which President Donald Trump had hoped for.

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

A source told Reuters that Mr Trump had approved the deal.

"I think President Trump deserves praise for renegotiating trade deals that have hurt people of this region for decades". We are working on that now.

"Democrats will closely scrutinize the text of the Trump administration's NAFTA proposal and look forward to further analyses and conversations with stakeholders", House Minority Leader Nancy Pelosi said in a statement.

Dairy Farmers of Canada issued a terse statement soon after the agreement was announced late Sunday, following 14 months of hard negotiations between the parties.

The agreement includes new rules for the auto sector, such as requiring 40 per cent of vehicle parts be made by workers paid at least $16 an hour, a labour rule Foreign Affairs Minister Chrystia Freeland said was unique in trade agreements and a very progressive way to protect jobs for higher-wage workers. He reiterated that the U.S.is now engaging in talks with the aim of preserving the current program and protecting industry needs. "Hopefully, we'll be able to work that out".

The inclusion of the clause surprised many trade experts, some of whom said it would impede Canada's trade aspirations with China.

Under the United States-Mexico-Canada Agreement (USMCA) tighter country of origin rules and labour standards for the auto and garment manufacturing industries mean production of those products could shift back to North America, which would be a blow to Asian producers.

Shares of Ford and General Motors both jumped more than 1 per cent following the news.

Jerry Dias, head of labour union Unifor, said the deal's improved country-of-origin provisions and higher wage floors for Mexican factories put the domestic industry on a better footing for growth.

"The threat of capricious auto tariffs has been lifted, stabilizing future investment" said Dias in a statement.

The analyst concludes that all members of parliament, regardless of their party affiliations or personal views on China and the United States, must vote conscientiously and protect Canadian sovereignty by rejecting USMCA Article 32.10, which must be approved even in the legislation of all three member countries.

Ken Neumann, Canadian director of United Steelworkers, criticized the Canadian government for engaging in "concession bargaining" rather than focusing on eliminating the tariffs.

It added: "Nothing in this agreement changes US law as it relates to our industry. Instead, it appears Canadian steel and aluminum workers are among those being sacrificed in the concessions made by the Liberal government in this deal", he said.

Steel and aluminum producers, however, came away disappointed with no deal in place to lift the tariffs the USA imposed on their products at the end of May.

"But its impact on the credit profile of firms reliant on the regional free trade agreement-such as in the auto, dairy, and agribusiness sectors-will vary depending on the specific details of the agreement", it said.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.