Tuesday, 16 October 2018
Latest news
Main » Dairy industry to benefit from new trade agreement

Dairy industry to benefit from new trade agreement

04 October 2018

Canadian Prime Minister, Justin Trudeau, speaks during a news conference at U.N. headquarters during the General Assembly of the United Nations in Manhattan, New York, U.S., September 26, 2018.

It's unclear whether the new agreement includes not implementing the 25 percent steel tariffs Trump had threatened.

The agreement, reached by leaders Sunday before NAFTA's October 1 expiration, will reopen dairy trade between US and Canada.

"If that's a concession we had to make to get something else - protecting Canadian cultural institutions, or making sure that jobs are secure in a place like Oshawa - if they want the name, fine, take that". Comments in the past two days from Larry Kudlow, head of U.S. President Donald Trump's National Economic Council, suggest the U.S. administration sees a united North American trade alliance as a means to further isolate China in the escalating trade war.

"This is going to be one of the most enforceable trade agreements we've ever had", one official said.

That means separate negotiations are needed to resolve those controversial tariffs, which are raising costs for US manufacturers that rely on metal imports. Some of the areas that are changed actually incorporate elements on North American trade from the TPP, which was negotiated under President Barack Obama. Freeland defended what Canada got out of the deal, saying that the USA side had initially sought the dismantling of Canada's whole supply-management system.

The US appears to be willing to give up demands to drop independent dispute resolution panels if it can have greater access to the Canadian dairy market.

"I don't really like it", Weekes said of the new "non-market" clause. "We never believed that it would be easy, and it wasn't, but today is a good day for Canada".

To fit into the non-market category, all one of the signatories has to do is to have that country on its list before the USMCA deal is signed. But President Perrin Beatty said the details of the text needed a closer look before a final verdict could be rendered. The threat of auto tariffs has clouded trade talks with several countries, including Japan and South Korea, which import cars and vehicle parts into the US. Mr. Trump has long blasted NAFTA, even before his presidential campaign.

The Trump deals nudge USA trade policy in a new, antiglobalization direction.

"We commend the negotiators for their commitment to finding a path forward that includes the U.S., Mexico, and Canada", Tom Donohue, the U.S. Chamber president and CEO, said in a statement. Given the TPA's notification requirements, that means Congress will not vote on the deal until 2019, when Democrats could be in control of at least one chamber of Congress in the US. "What it spells out for consumers is that they'll be paying more".

Article 32.10 of the agreement states, in part, "Entry by any Party into a free trade agreement with a non-market country, shall allow the other Parties to terminate this Agreement on six-month notice and replace this Agreement with an agreement as between them (bilateral agreement)".

The political consequences of the trade deal for Trump and Republicans in Congress remains to be seen, but the deal has already been received as a downpayment for future successes that Trump's supporters hope his trade policy will yield. Canada had agreed to provide U.S. dairy farmers access to about 3.5% of its approximately $16bn annual domestic dairy market, the sources said, adding that the Canadian government was prepared to offer compensation to dairy farmers hurt by the deal.

The new trade agreement, Trump asserted, would usher in a new dawn for the country's auto industry and transform North America into a manufacturing powerhouse and allow the USA to reclaim the supply chain that went out off-shores.

Dairy industry to benefit from new trade agreement