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Canada Agrees To Sign US Agreement Alongside Mexico, Replacing NAFTA With USMCA

DIVYIA ASTHANA | 0
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| October 1 , 2018 , 11:07 IST

After a series of negotiations between US and Canada officials, Canada agreed to join the United States and Mexico in a trade deal that would replace 1994 North American Free Trade Agreement (NAFTA) with the United States-Mexico-Canada Agreement (USMCA), officials said on Sunday.

“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)," said 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," the officials said.

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"It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home," Lighthizer and Freeland added.

“We look forward to further deepening our close economic ties when this new agreement enters into force," they said, crediting Mexican Economy Secretary Ildefonso Guajardo "for his close collaboration over the past 13 months.”

The US had imposed a deadline of midnight September 30 for Canada to reach a new 3-nation deal. The new deal will provide US with a greater access to Canada's dairy market, which was considered vital for US dairy manufacturers, a senior administration official said.

The deal is expected to be signed by all 3 nations, the US, Canada and Mexico by the end of November.  

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“This is a big win for the United States, Mexico and Canada,” the official said.

Negotiators on behalf of the US, Canada and Mexico had begun talks to replace the NAFTA more than a year ago. The new agreement came about just one month after the US and Mexico announced that they had reached a new trade pact to replace the NAFTA, which would eliminate tariffs on most goods traded between the 3 nations.

Although Canada was a part of the discussions on renegotiating NAFTA last year, the negotiations reached a standstill in May as Canada stayed on the sidelines while the US and Mexico continued with their talks. After the US and Mexico reached a new deal, US President Donald Trump indicated he was ready to move forward with the deal without Canada if an agreement could not be reached and also threatened to place tariffs on Canada-made cars.

Talks with Canada accelerated over the weekend, and ahead of the US imposed deadline of midnight Sunday, the deal was signed.