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United States and Canada reach trade deal

04 October 2018

The government found support from Canada's chief negotiator of the original North American Free Trade Agreement, who said an unusual clause covering future free trade with "non-market" countries did not infringe Canadian sovereignty.

President Donald Trump on Monday lauded the new trade accord with Canada and Mexico as the most important ever for the United States and "a historic win" for American farmers, manufacturers and autoworkers.

US President Donald Trump and Canadian Prime Minister Justin Trudeau reportedly reached a deal on a revised North America Free Trade Agreement (NAFTA) late Sunday evening, according to officials briefed on the negotiations. The auto industry welcomed a deal that included all three countries, fearing a breakup of NAFTA would devastate long-built supply chains that cut across borders.

The agreement, reached on Sunday night, protects Canada's automotive industry from potentially devastating US tariffs, but includes no assurance that Washington will lift punitive measures it imposed on Canadian and Mexican steel and aluminum in June.

The clause stipulates that the other two nations in the pact have the option of pulling out of the deal if any one of them signs a free trade deal with a "non-market" country. "We've been able to come to an agreement that creates more stability and a greater level of confidence in the business community, confidence in making investments in Canada and as well investments in the other North American economies".

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

In 2017, the Department of Commerce published a report that concluded that China was a non-market economy.

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Wenweipo, a pro-Beijing newspaper based in Hong Kong, ran an article on October 2, titled, "Canada and the U.S. Got What They Need and Mexico is the Loser", arguing that the terms of the new agreement were akin to concessions that would hurt Mexico's economy.

However, he said he needs to be assured that Mexico is going to fix weak labor laws and enforce new worker protections.

Canada is the top exporter of steel and aluminum to the United States.

In its latest Global Economic Outlook, Fitch said that trade tensions, particularly with regard to the United States and China, have begun to affect global growth forecasts. The US will also benefit from duty-free exports of particular types of cheese to Mexico.

"Obviously, China is a significant, growing player on global trade". Congress then has to approve the deal, which is likely to be up for a vote next year. "But in terms of rights and obligations, it doesn't impose any obligation on Canada not to negotiate an agreement with anybody".

"I think we should deal with that", Wildeboer said, before proposing a solution from the Canadian side.

Lilly said if digital products fall outside the general exemption on cultural industries, it could limit Ottawa's ability to set Canadian content standards in digital media.

United States and Canada reach trade deal