Monday, 12 November, 2018

US, Mexico, Canada agree on new free trade pact

US, Mexico, Canada agree on new free trade pact US, Mexico, Canada agree on new free trade pact
Nellie Chapman | 04 October, 2018, 15:18

"Right now, we're at break even or below".

The United States and Canada forged a last-gasp deal on Sunday to salvage a three-country, $1.2 trillion open-trade zone agreement with Mexico that had been about to collapse after almost a quarter century.

Beijing has demanded that the World Trade Organization recognize it as a "market economy" since its WTO accession agreement expired in December 2016, a move that would severely limit Western trade defenses against cheap Chinese goods.

While the section does not specifically name any country, trade experts have no doubt that its prime target is China.

The United States and China are locked in a spiraling trade war that has seen them level increasingly severe rounds of tariffs on each other's imports.

China has been "ripping us for so many years" with its "theft of intellectual property" and through a $375bn trade deficit, by which China sells more laptops, clothes and other goods to the United States than America exports in the other direction, Trump said.

But Canada has been obliged to make concessions, in particular allowing United States dairy farmers access to about 3.5 percent of its $16 billion (13.8€ billion) domestic market.

He said it was too soon to talk to China about trade deal and said it was "privilege" for other countries to trade with the United States and for them "to come in and attack the piggy bank".

Canada, the US' No. 2 trading partner, was left out when the US and Mexico reached an agreement last month to revamp NAFTA. Senior government officials spent Tuesday playing down those fears.

Freeland was seen wearing that same shirt on Sunday in Ottawa, before a deal was reached. "China is, of course, a place where we continue to have discussions".

The NAFTA deal was signed in 1994, and governed more than $1.2 trillion dollars worth of trade between the three countries. "It's a point of view that they have".

"We're disappointed", Francois Legault, head of front-running Coalition Avenir Quebec, told reporters Monday in L'Assomption, Quebec.

As well as concluding the North America deal, the United States has recently signed a revised trade agreement with President Moon Jae-in of South Korea, and is starting talks on a separate two-way deal with Prime Minister Shinzo Abe of Japan.

Trump acknowledges that he had "very strong tensions" with Prime Minister Trudeau.

Daniel Schwanen, vice-president of research at economic think tank the C.D. Howe Institute, said the clause "is an imposition on our ability to negotiate, for sure".

The deal will curtail investment in Canada's dairy sector and likely cause farmers and processors to put any expansions on hold, Wiens said.

"It's less of a barrier than it may sound", he said.

This article of the agreement also defines a "non-market" country as "a country that on the date of signature of this agreement at least one Party has determined to be a non-market economy for purposes of its trade remedy laws and is a country with which no Party has a free trade agreement".

"It doesn't have to be a full-fledged free-trade agreement to be a useful conversation", he said.