WASHINGTON—The leaders of Canada, the United States and Mexico signed their new trade agreement early on Friday, hailing the revised NAFTA as a win for all three countries — though for different reasons, with Prime Minister Justin Trudeau emphasizing continuity and U.S. President Donald Trump emphasizing change.
Trudeau said he signed the agreement to preserve the “stability” of the Canadian economy, saying that the deal “lifts the risk of serious economic uncertainty that lingers throughout a trade renegotiation process.” He described the agreement, which maintains most of the provisions of the original North American Free Trade Agreement, as a “new NAFTA.”
Trump, conversely, highlighted specific new provisions of the agreement, saying it “changes the trade landscape forever” and will raise wages, bring back manufacturing jobs and boost farmers.
“This is an agreement that first and foremost benefits working people,” Trump said.
The Democrats took more than four years to approve trade deals struck by Republican president George W. Bush a decade ago. They are not expected to move quickly to approve Trump’s project.
Trudeau signed the document despite Trump’s refusal to immediately lift his tariffs on Canadian steel and aluminum. Canada’s ambassador to the U.S., David MacNaughton, had suggested earlier in November that Trudeau might not attend a ceremony unless the tariff issue was resolved.
Trudeau described last week’s factory cuts by General Motors as a “heavy blow.” Directly addressing Trump, he said, “Donald, it’s all the more reason why we need to keep working to remove the tariffs on steel and aluminum between our countries.”
But Trump has argued again this month that those tariffs have fuelled a comeback by the U.S. steel and aluminum industries. After the signing, U.S. trade chief Robert Lighthizer told reporters that negotiations are ongoing but that they see the tariffs as successful policy, CBC reported.
The new agreement is to be known as the USMCA (U.S.-Mexico-Canada Agreement) in U.S. law and CUSMA (with Canada first) in Canadian law.
The agreement sets rules governing dozens of industries. It keeps the overwhelming percentage of North American trade tariff-free.
Perhaps its most significant changes are related to the auto industry, for which Trump insisted on new protectionist provisions intended to wrest some manufacturing back from Mexico and overseas. The agreement includes a new rule, for example, that a car will only be freed from tariffs if 40 per cent or more of its contents are produced by workers earning $16 (U.S.) per hour or more.
Among other things, the agreement also lengthens copyrights for creative works and patent protection for certain sophisticated medicines, slightly opens up the protected Canadian dairy industry to U.S. access and eliminates the long-controversial “Chapter 11” provision between Canada and the U.S. allowing investors to sue governments for allegedly violating their rights.
Trudeau’s government has informally referred to the new agreement as a new NAFTA, noting that much of the original remains in place. Trump, who has called NAFTA the worst trade deal in world history, has wrongly insisted that he is terminating NAFTA and replacing it with something entirely new.
Both Trudeau and Trump have taken criticism over the new agreement. The Canadian Conservatives have accused Trudeau of making too many concessions to Trump, who had threatened to “ruin” the Canadian economy unless he got his way. Canada’s dairy lobby urged Trudeau this week not to sign the agreement unless it was changed to give the U.S. less influence over the industry.
Trump, meanwhile, has taken criticism from all sides, with some Republicans saying the deal is too protectionist and some Democrats saying it does not do enough to enforce provisions meant to raise the lax Mexican labour standards they say is responsible for the decline in American manufacturing
When the three countries reached the deal at the end of September, Trump said he was not at all confident of obtaining congressional approval. He struck a more optimistic note on Friday, saying, “It’s been so well-reviewed, I don’t expect to have very much of a problem.”
The three countries continued to talk out the agreement all the way up to the signing ceremony.
“A vast number of technical details need to be scrubbed and wrapped up,” Foreign Affairs Minister Chrystia Freeland said on Monday, the Canadian Press reported. “The fact that this is an agreement in three languages adds to the level of technical complexity and it is on that level that we are just being sure that all the Is are dotted and all the Ts are crossed.”
It is possible substantive negotiations will resume at some point. To placate critics of the original NAFTA negotiated under Republican president George H.W. Bush, Democratic president Bill Clinton negotiated “side letters” adding some new provisions.
Relations between the U.S. and Canada took repeated blows during the negotiation Trump initiated in August 2017, largely because of his public attacks on Trudeau. On Friday, the president described the prime minister as a friend.
“Battles sometimes make great friendships,” Trump said. He added later: “We’ve taken a lot of barbs and a little abuse, and we got there. It’s great for all of our countries.”
The agreement was signed by Mexican President Enrique Pena Nieto on his last day in office.