US, Canada and Mexico praise 'historic' NAFTA replacement deal

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The loonie traded higher at 78.13 cents U.S. compared with an average of 77.25 cents USA on Friday.

The deal is a reworking of the 1994 North American Free Trade Agreement (Nafta), which underpins $1.2 trillion in trade between the three countries. Washington's assurances about Section 232 tariffs for the auto sector, made in side letters, are flimsy at best, and the United States could still try use the threat of tariffs to encourage the deal's speedy approval in Mexico and Canada.

US President Donald Trump and Canadian Prime Minister Justin Trudeau during a meeting in June.

The U.S. -Mexico-Canada Agreement (USMCA) updates and replaces the almost 25-year-old North American Free Trade Agreement (NAFTA), which Trump had threatened to cancel.

For instance, Canada scored wins with the preservation of NAFTA's state-to-state dispute-resolution system and cultural provisions that carve out a certain amount of the Canadian media market for domestically produced programming.

All in all, the new NAFTA is definitely a modern and updated version of its important predecessor, which the U.S. Department of Agriculture characterized as one of the most successful trade agreements in history.

He also said that Mexico and Canada have agreed to labour, intellectual property and environmental provisions in the new agreement. Automakers looking to avoid duties on vehicles imports will need to use a higher percentage of North American auto parts and pay workers more, a provision created to make US labor more competitive.

Trump has regularly blasted NAFTA as disastrous for the US economy.

Those rules require that a certain percentage of an imported vehicle's components be manufactured in the United States. In addition, Canada will get rid of the "Class 7" pricing system that was seen as disadvantaging U.S. farmers.

"It's helped our milk futures just in the 14 hours that it's been discussed, so our milk futures have gone up not a lot, but significant enough for us all to notice", she said.

"When people are saying there's a cap on auto exports, it's only in the limited situation where the goods are non-conforming with the rules of origin".

Brian Dicken, the VP for Advocacy and Public Policy with the Toledo Regional Chamber of Commerce says, "Given a level playing field (US auto workers) can compete with anybody on producing products we want and need". "The practical consequences are limited, if any".

Maxwell said if the new USMCA agreement is signed by Congress, U.S. dairy farmers will benefit.

"It's not necessarily going to be a more hard Congress", Roh said, saying Democrats "may just want to get it done".

"I think it's the best deal they could have made", said Mark Warner, an worldwide trade lawyer.

Insiders got wind of a breakthrough after 14 months of tumultuous talks and just hours before USA and Mexican trade authorities were set to publish their own trade agreement without Canada as a signatory.

And he's cheering the fact it will give American farmers and dairy producers greater access to markets in Canada and Mexico, protect auto manufacturing jobs and encourage innovation on USA soil.

He said the deal will terminate NAFTA, which he criticized as one of the worst trade deals ever made.

"It's a great win for the president and a validation of his strategy in the area of global trade".

Meantime, congratulations were being offered among key stakeholders who have been on the edge of their seats waiting to see if Canada and the United States would find common ground. President Trump has long denounced NAFTA, so despite the fact the same countries are involved, the name, too, has changed. Supply management, he said, will be in place for future Canadians. But President Perrin Beatty said the details of the text needed a closer look before a final verdict could be rendered.

Any hopes a new deal would lift the aluminum and steel tariffs the USA imposed on Canada last spring were quickly dashed. The issue has also figured prominently in Quebec, where voters go to the polls in a provincial election on Monday.