Canada trade deal may mean higher vehicle prices

Canada trade deal may mean higher vehicle prices

President Trump and Canadian Prime Minister Justin Trudeau shake hands during a meeting in the Oval Office in February.

The pact, now called the U.S. -Mexico-Canada Agreement, or USMCA, will give American farmers greater access to Canada's dairy market and require automakers to make more of their vehicle's parts in North America (if they don't want to pay tariffs).

And on the matter of Section 232 tariffs, Trump's trade weapon of choice, US officials say the new deal doesn't address them directly, since they are a matter for the Department of Commerce.

Central to the discussions Sunday was an effort to secure some sort of assurance that would allow Canada to avoid the dreaded Section 232 tariffs on steel and aluminum, and to protect itself from Trump's repeated threats to impose similar measures on autos.

Since the original NAFTA did not eliminate all tariffs on agricultural trade between the United States and Canada, the USMCA will create new market access opportunities for exports to Canada of dairy, poultry, and eggs, and in exchange the U.S. will provide new access to Canada for dairy, peanuts, processed peanut products, and a limited amount of sugar and sugar-containing products.

Juan Carlos Baker, Mexico's under secretary of foreign trade, is expected to present the details of the agreement to the Mexican senate, according to the Times.

The United States "finally came to their senses" and created an environment conducive to reaching an agreement with Canada, said Jerry Dias, head of the major Canadian union Unifor, a key player in the negotiation drama.

The agreement gives US farmers greater access to the Canadian dairy market.

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The U.S. had demanded a sunset clause that would kill NAFTA after five years unless the countries agreed to extend it. The Trump administration officially notified Congress of the U.S. -Mexico trade agreement on August 31.

The US made a deal with Mexico in August, but relations with Canada over the trade pact had become increasingly strained in recent weeks.

While Peter Navarro, the director of the White House National Trade Council, said the new deal means that "NAFTA is dead", the USMCA still retains large swaths of the original deal.

Aylard, herd manager at the family's fourth-generation Brackenhurst Farm in North Saanich, said Island dairy farmers are concerned to the point where they might hesitate to invest in the future. Describing the pact as a great deal for the three countries, Trump said it puts them in a position that they have never been in before. That means United States dairy farmers can likely send a lot more milk protein concentrate, skim milk powder and infant formula to Canada (and those products are relatively easy to transport and store). President Trump weighed in on the name during a Monday press conference, saying, "It has a good ring to it". It would have been an enormous political blow to the Trudeau government and - much more important - a real danger to a Canadian economy that for better or worse has been shaped for decades around easy access to the world's biggest and most dynamic market.

Officials reached the US-Mexico-Canada Agreement after a year of negotiations Sunday.

On Monday, Trump tweeted a congratulatory message to Mexico and Canada.

"We've been sacrificed", he said in an interview. Under the new agreement, three-quarters of a car's parts must originate from North America in order to be exempt from duties.

"I look forward to reviewing this deal to confirm it meets the high standards of Trade Promotion Authority", he said in a statement.

Some of the key differences: increased dairy-market access for the U.S., a new sunset clause, and tougher auto rules. "Second, the pricing system allowed for Canada to be competitive to export their excess skim milk powder, taking away market share from the U.S".

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