Markets

Automakers relieved, dairy farmers angry in wake of NAFTA replacement deal

Automakers relieved, dairy farmers angry in wake of NAFTA replacement deal

Judging by the initial reaction, a setback for freer trade on the continent will be judged a "win" for all involved: Trump gets his first "major" trade deal just in time for the midterm elections; Mexico's outgoing president, Enrique Peña Nieto, will leave office with significant accomplishment of his own, and the president-elect, Andrés Manuel López Obrador, will avoid beginning his term on December 1 with the headache of a trilateral trade negotiation; Prime Minister Justin Trudeau, will be able to say that he successfully defended his country from an economic calamity. The Trump administration recently escalated the US's trade war with China, imposing new tariffs on $250 billion worth of Chinese goods. He says this latest agreement goes into more detail on environmental issues than the original pact signed almost 25 years ago. The association notes that this aspect of USMCA is beneficial for manufacturing customers that produce goods from scrap commodities processed in North America since they will be able to include scrap as part of the new 60 percent transaction value (or 50 percent of cost) cumulation threshold for duty-free trade within North America.

THE FACTS: North America already is a manufacturing powerhouse.

The agreement, Moody's said, increases market confidence that a North American free trade agreement will remain in place.

"There could be Democratic support for this" as it contains provisions favorable to American labor - a traditional backer of the Democratic Party, National Economic Council Director Larry Kudlow tells VOA.

I don't think any country would like someone to be in their critical trade negotiations that was not tough. "There are really no poison pills in here for Democrats".

Other trading partners had been tough on the United States, he said, including the European Union, which introduced retaliatory tariffs on U.S. goods in June.

Trump hasn't made his disdain for NAFTA a secret, calling it the "worst trade deal ever made" and a job-killing "disaster" for the United States.

It will see agreements to boost U.S. access to Canada's dairy market and protect Canada from possible USA auto tariffs, according to reports. Canada is by far the No. 1 destination for US exports, and the USA market accounts for 75 percent of what Canada sells overseas.

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East Japan Railway stopped all train services in and around Tokyo at 8:00 pm, shortly before the typhoon hit the Japanese capital. The storm has disrupted air travel, with an unspecified number of flights suspended Sunday, according to public broadcaster NHK.


In June, Washington imposed steep import tariffs on steel (25 percent) and aluminum (10 percent) from Mexico, Canada and the European Union. "Just for those babies out there that talk about tariffs". Without Chapter 19, these cases would be resolved in court in the country imposing the duties, so the US would be arguing on home turf.

The Trump administration had imposed a midnight Sunday deadline for Trudeau's government to reach agreement on an updated NAFTA or face exclusion from the treaty.

But there is a widely shared belief that Canada made concessions and the US did not.

It added: "Nothing in this agreement changes USA law as it relates to our industry".

Meredith Crowley, worldwide trade economist at the University of Cambridge, said the agreement on dairy appeared be a "cosmetic concession", suggesting Canada had done well out of the pact.

The concessions are in theory a problem for Trudeau, whose ruling Liberals say they need to pick up seats in Quebec in an election set for October 2019 if he is to retain power.

In a September 30 statement, the National Association of Manufacturers essentially breathed a sigh of relief.

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 Nafta.


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