US and Canada Reach a Last-Minute Deal Renaming NAFTA as USMCA

Canada, which was expected to be isolated from the North American Free Trade Agreement (NAFTA), has agreed to sign a deal with the United States and Mexico, on Sunday night. After more than a year of sinuous negotiations, the three-country NAFTA deal has been revamped, just hours before a midnight deadline imposed by the US.

The agreement reached would allow US farmers greater access to the dairy market of Canada. Besides, it offers Canada protection if Trump goes ahead with plans to impose tariffs on cars, trucks and auto parts imported into the US.

The U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland, said in a joint statement that the agreement “will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.”

In order to keep the 24-year-old deal alive, negotiators from all three countries spent the entire weekend working over the phone. The new deal reached on Sunday will be called the United States-Mexico-Canada Agreement, or USMCA.

Prime Minister Justin Trudeau said, “It’s a good day for Canadians,” adding that he’ll have more to say on Monday.

Expressing his views via Twitter, trade negotiator for Mexico’s incoming president, Jesus Seade wrote, “We celebrate a trilateral deal. The door closes on trade fragmentation in the region.”

Representatives for Mexican president-elect Andres Manuel Lopez Obrador’s government have invited a press conference on Monday, to discuss details of the Trade Deal.

Canada and Mexico, both are two of the biggest trading partners of the United States. However, while the US and Mexico had reached an agreement on replacing NAFTA last month, Canada was left out.

On August 31, the trump administration officially notified Congress of the tentative bilateral trade agreement. Besides, the US President threatened to go ahead with a revamped NAFTA, with or without Canada.

He said that there is “no political necessity to keep Canada in the new NAFTA deal.” Although, it was unclear whether he had the authority from Congress to pursue the deal with only Mexico.

Prior to the agreement, several lawmakers had warned of not supporting a deal without Canada.

On Friday, US Senator Ron Wyden of Oregon, the top Democrat on the Senate committee that oversees trade, said, “It would be a monumental mistake to do this without Canada. It’s basically surrendering on fixing NAFTA.”

Besides, the US Chamber of Commerce had also said that it would be “unacceptable to sideline Canada, our largest export market in the world.”

As Canada has been reinstated in the regional trading bloc, some lawmaker immediately expressed relief.

Senate Finance Chairman Orrin Hatch, R-Utah, said, “I am pleased that the Trump administration was able to strike a deal to modernize NAFTA with both Mexico and Canada. NAFTA is a proven success.”

The North American Free Trade Agreement marked down most of the trade barriers between the three countries, leading to a surge in trade between them. The deal is not just a relief for the three countries, but also the businesses that majorly rely on the imports. A deal without any of the three members could have caused an upheaval in the functioning of several such industries.

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