Canadian dairy farmers' group pans new trade pact with U.S., Mexico

Canadian dairy farmers' group pans new trade pact with U.S., Mexico

The United Steelworkers of Canada union called the agreement a "sellout" for steel and aluminum workers.

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.

After a highly elongated, turbulent renegotiation process, Canada has reached a tentative deal with the United States and Mexico to continue the 24-year-old North American Free Trade Agreement (NAFTA).

He says the deal, reached late Sunday, will govern $1.2 trillion United States in trade, making it the biggest agreement in the country's history, and marks the end of an era during which the USA has been "treated so badly" on trade by other countries around the world.

"It's a good day for Canada", the country's Prime Minister Justin Trudeau told reporters after a late-night cabinet meeting. Dairy access was a key US demand, made repeatedly by Trump, though the USA already exports about $500 million of milk products duty-free to Canada every year.

The prime minister took no questions from reporters who gathered to monitor the latest developments as the intense last-minute push before the USA -imposed midnight Sunday deadline inches closer.

"It's a great win for the president and a validation for his strategy in the area of worldwide trade", a senior Trump administration official said.

Now that a tentative deal has been reached, the US Congress is required to go through a 60-day review of the draft agreement, which could potentially allow for NAFTA's re-signing around December 1.

But it came at a cost. Pierre Lampron, president of Dairy Farmers of Canada, said in a statement.

Canada has agreed to provide USA dairy farmers access to about 3.5 percent of its approximately $16 billion annual domestic dairy market.

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"We fail to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood".

"They used to call it NAFTA", said Trump after a deal was reached with Mexico. To placate Trump, Mexico agreed in August to provisions that would require 40 percent to 45 percent of a vehicle be built in countries where auto workers earn at least $16 an hour to qualify for NAFTA's duty-free benefits.

Auto exports from Canada to the U.S. are to be capped at 2.6 million vehicles, if Trump imposes global tariffs on cars on national security grounds. The quota would increase current exports, safeguarding Canadian plants. It is also well above the 1.8 million cars and SUVs Mexico sent north a year ago.

Mexico agreed to a revamped NAFTA last month, triggering weeks of hectic bargaining with the U.S.to try to bring Canada into the agreement, as President Donald Trump and other administration officials threatened to go it alone with Mexico if Canada did not make "concessions".

However, the deal has failed to resolve U.S. tariffs on Canada's steel and aluminium exports.

"It's a good night for Mexico, and for North America", Mexican Foreign Secretary Luis Videgaray said.

The news delighted financial markets which had been alarmed at the potential collapse of NAFTA. The Canadian source said that an exemption will be made for autos, though the issue of steel and aluminum tariffs remain.

The Canadian dollar hit a four-month high against the US greenback, and investors raised bets for as many as four additional interest rate increases from the Bank of Canada by the end of 2019.

"That will lead to a rise in trust in the US economy, so it's easy for risk sentiment to improve".

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