Canada Dairy Industry: New NAFTA a Bad Outcome

Canada Dairy Industry: New NAFTA a Bad Outcome

Canada Dairy Industry: New NAFTA a Bad Outcome

The United States and Canada reached a deal to update NAFTA and keep it a trilateral pact with Mexico, beating a midnight deadline with agreements to boost us access to Canada's dairy market and protect Canada from possible USA autos tariffs, two Canadian sources with direct knowledge of the talks said on Sunday.

The US had imposed a deadline of midnight on Sunday for differences to be settled. "The best outcome for both countries is to lift tariffs on both sides".

What's in the new deal?

"We're seeing this as an added bonus because it does give our dairy farmers, and dairy farmers across the country added access to that Canadian market that's so important to them, and it looks like poultry and eggs will also have some added access to the Canadian market" said Kenney.

Animated by seventeenth century mercantilist ideas about trade deficits, all Trump seems to know for sure is that the deficits in merchandise trade are always and automatically bad, and that all existing trade agreements, particularly multilateral agreements like the North American Free Trade Agreement (NAFTA), that produce such deficits are therefore likewise always bad. The US will also benefit from duty-free exports of particular types of cheese to Mexico.

The deal is said to involve more U.S. access to Canada's dairy market and a cap on Canada's auto exports to the US. One letter promises Canada will be exempt from any future USA tariffs imposed on automobiles and auto parts as a matter of national security. However, under USMCA, new quotas will be set which are expected to increase market access for United States farmers.

Morneau says that's slightly higher than the 3.25 per cent that was agreed to under another deal - the Comprehensive and Progressive Agreement for Trans Pacific Partnership - with 10 countries including Mexico, Japan and Australia.

Frustrated at what it saw as Canadian intransigence, his administration had been focusing instead on a bilateral pact with Mexico, and sealed a deal in August.

However, opposition was growing to a revised accord without Canada.

"We have governments that have come together on an agreement and actually helped the North American supply base as opposed to [having] sold us down the river like previous agreements have done", he said.

What's been the reaction and what happens now?

Two senior government officials confirmed the meeting.

Trump has approved the deal with Canada, a source familiar with the decision said.

The news delighted financial markets which had been alarmed at the potential collapse of NAFTA.

Following the announcement, the Canadian dollar rose to its highest value since May against the United States dollar.

This will allow them to sign the agreement before Mexico's President Enrique Pena Nieto leaves office December 1, the date that was the cause of the last minute flurry of activity.

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