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Sergey Savastiouk's Avatar
published in Blogs
Oct 02, 2018

Late-Night Deal Brings Canada into NAFTA 2.0

After a marathon negotiation session that began Sunday mid-day and lasted approximately 11 hours, the U.S. has managed to bring Canada on-board for a revision of the long-standing NAFTA agreement, which will henceforth be known as the U.S.-- Mexico – Canada Agreement (USMCA).  

President Trump imposed an October 1 deadline which precipitated the lengthy meeting, and made repeated public statements that the United States would be willing to leave Canada out of the deal if they weren’t willing to negotiate the terms of the agreement in a timely manner. Such an eventuality would have left Canada without the protections of a then-defunct NAFTA, although the legality of such a move was seen as highly questionable by some.

The resulting agreement preserves the panel review system as in Chapter 19 of NAFTA, despite threats by Trump to scrap it, wherein each member is given a venue through which to challenge the trade policies of other members. Canada agreed to relax protectionism for its dairy industry, which should result in more dairy exports for the US. The agreement is intended to increase North American auto manufacturing and domestic auto purchases, which also primarily benefits the US.  Policies were drafted concerning recently-emerged genres of financial services as well as intellectual property rights for digital assets, which is possibly a thinly-veiled reference to cryptocurrencies.

Much of the revised pact aims to undo a trade deficit with Mexico that only started after the original NAFTA agreement was enacted in 1994.  The leaders of the the three countries plan to come together for a signing ceremony this fall.

 

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