U.S. And Canada Strike Trade Deal

U.S. and Canadian negotiators have reached an agreement assuring Canada will be part of the renegotiated North American trade pact. As part of the deal, Canada agreed to eliminate its controversial Class 7 dairy pricing program.

Sept. 30 was the deadline set by the Trump administration to for a deal to rewrite NAFTA. The new deal will be known as the United States-Mexico-Canada Agreement or “USMCA.”   That negotiators had arrived at an agreement was announced late Sunday night after a marathon bargaining session. The deadline was necessary in order to get an agreement that can be signed by Mexico’s outgoing president, Enrique Peña Nieto, before the new administration there takes over on Dec. 1. Leaders from the three countries have to sign it and Congress and the legislatures in Canada and Mexico have to approve it.

The U.S. is getting expanded access to Canada’s protected dairy market, long a thorn in the side of trade talks. Canada will eliminate its so-called Class 7 milk pricing system that U.S. farmers complained had dried up demand for their exports of the product. New safeguards will be created to prevent major export increases for certain dairy products..  It is unclear exactly how much access will be given to the Canadian diary market, but U.S. administration officials say it’s above the 3.25 per cent set out in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Canada also agreed to eliminate a recent milk-ingredient pricing program (Class 7)

Canada wanted the Administration to end the 25 percent tariffs on Canadian steel. That didn’t happen as part of the agreement. The two countries are however still discussing lifting those tariffs, but a senior White House official said Sunday that process is on a “completely separate track.” Canada’s Prime Minister Justin Trudeau has called the steel tariffs “insulting and unacceptable” since the two nations are such close allies.  MWFPA and the canned food industry continue to strongly oppose the tariffs.

The new agreement comes just one month after the U.S. and Mexico announced that they had reached a new trade pact to replace NAFTA, which essentially eliminated tariffs on most goods traded among the U.S., Canada and Mexico, and made it easier for companies in those three countries to move goods and supplies across their borders.

 

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