Ag, Manufacturing Welcomes New NAFTA

In 11th-hour talks, the U.S. and Canada struck a deal to revise the North American Free Trade Agreement. The newly named United States-Mexico-Canada Agreement, or USMCA, must be ratified by Congress. It isn’t likely to be enforced until next year at the earliest. Details are still emerging.

Here are key components of the deal and reaction from key players.

Agriculture – Farmers and agribusinesses welcome the agreement, as it is expected to preserve tens of billions of dollars in farm goods traded annually across the countries’ borders. It also should prompt the U.S., Canada and Mexico to each remove tariffs on one another’s products that have hurt U.S. prices for pork, cheese and other foodstuffs. Mexico and Canada have become critical pillars of demand and supply for the U.S. food and agriculture industry since NAFTA took effect in 1994.

One of Canada’s last-minute concessions was a pledge to curb protection for its dairy industry, a policy President Trump has frequently criticized. That is likely to win praise from lawmakers from milk-rich U.S. states, but it could have political ramifications in Canada.

“This was a hard-fought win and we commend the administration for all the efforts to solidify the trading relationships we have with our North American neighbors, said Zippy Duvall, president of the American Farm Bureau Federation.

Manufacturing – U.S. manufacturers welcome anything that precludes further disruption for companies that have spread their operations and supply chains across the continent in the past quarter-century.

“Manufacturers are extremely encouraged that our call for a trilateral agreement between the United States, Canada and Mexico has been answered,” said Jay Timmons, chief executive of the National Association of Manufacturers. Manufacturing trade groups said they would scrutinize specifics of the deal as they are released.

Steel – The agreement will leave in place Trump administration tariffs on imported steel and aluminum, as U.S. negotiators have insisted that any changes to U.S. duties on steel and aluminum that took effect in June be addressed separately from a broader trade deal.

Source: Wall Street Journal