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U.S. and Canada Reach Deal to Rehaul NAFTA

U.S. and Canada Reach Deal to Rehaul NAFTA

Monday, October 1st, 2018

After a bilateral agreement between the United States and Mexico was announced this August (as reported by our sister publication AndNowUKnow), a month of negotiation between the U.S. and our neighbor to the North—and the ensuing speculation—has culminated in the announcement of the United States-Mexico-Canada Agreement (USMCA). Canada has agreed to enter into a trade agreement with the United States and Mexico—replacing the existing NAFTA framework with a modernized trade agreement.

(Left) Robert Lighthizer, Trade Representative, United States of America and (right) Chrystia Freeland, Foreign Affairs Minister, Canada

“Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement (USMCA),” noted U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland in a joint statement. “USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade, and robust economic growth in our region.”

According to USA Today, the U.S. had imposed a deadline of midnight Sunday, September 30, 2018, to reach a three-country deal. Under the terms of the 11th hour agreement, the U.S. will have greater access to Canada’s dairy market—a source of concern in the month leading up to the agreement.

In a joint statement released the following Monday, the National Milk Producer’s Federation (NMPF), the U.S. Dairy Export Council (USDEC), and the International Dairy Foods Association (IDFA) thanked Trump Administration negotiators for “fighting hard against Canada’s trade-distorting practices.”

Tom Vilsack, President and CEO, USDEC“The outlines of the NAFTA pact remain intact, which will allow the U.S. agricultural sector to continue developing new international markets for our farmers,” said Tom Vilsack, President and CEO of USDEC. “We also need to pursue new free trade agreements with other nations and resolve our trade conflicts with China. It is imperative that the United States remains an integral player in driving the global trade agenda.”

Likewise, Michael Dykes, D.V.M., President and CEO of IDFA, described the importance of the new agreement to U.S. dairy farmers.

Michael Dykes, D.V.M., President and CEO, IDFAMaintaining dairy market access in Mexico and improving market access into Canada were IDFA’s top priorities during the talks to modernize NAFTA,” said Dykes. “We’re also pleased that the Administration was successful in getting Canada to eliminate Class 7 pricing. This new agreement will preserve our vital partnership with both countries and allow the U.S. dairy industry to seek more export opportunities.”

And NMPF President and CEO Jim Mulhern also expressed appreciation for the “incremental progress” that the overhauled agreement would bring to U.S. dairy farmers.

Jim Mulhern, President and CEO, NMPF“This agreement, when implemented, should give us additional marketing opportunities that will allow us to provide high-quality American dairy products to Canada, which means we’ve made incremental progress,” said Mulhern. “We appreciate that the Trump Administration continually raised the profile of our issues at the negotiating table.”

The Wall Street Journal noted that news of the accord came just four days after trade representatives from the Trump administration told Congress that the Sunday deadline appeared infeasible.

Officials from the U.S. and Canada worked throughout “a frenetic Sunday,” said the New York Times. Canadian officials reportedly teleconferenced throughout the day with their American counterparts, and Canadian Prime Minister Justin Trudeau convened a special cabinet meeting just hours before the end-of-day deadline. Meanwhile, Mexico’s Under Secretary of Foreign Trade presented the agreement to the Senate of the Republic of Mexico just before midnight.

“It’s a good day for Canada,” Trudeau told reporters, according to the WSJ.

Details of the trade agreement are forthcoming. The pending USMCA is expected to be signed into law in late November.

For more updates as they occur, keep reading Deli Market News.