Tariff tensions shadow US, Canada, Mexico trade pact signing

Friday, November 30, 2018
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AP

President Donald Trump, center, shakes hands with Canada’s Prime Minister Justin Trudeau as Mexico’s President Enrique Pena Nieto looks on after they signed a new United States-Mexico-Canada Agreement during a ceremony at a hotel before the start of the G20 summit in Buenos Aires, Argentina, Friday.

BUENOS AIRES, Argentina (AP) — President Donald Trump teamed up with the leaders of Canada and Mexico on Friday to sign a revised North American trade pact, a deal that fulfills a key political pledge by the American president but faces an uncertain future in the U.S. Congress. The celebratory moment was dimmed by ongoing differences over Trump’s steel and aluminum tariffs, as well as plans for massive layoffs in the U.S. and Canada by General Motors.

The U.S.-Mexico-Canada Agreement is meant to replace the 24-year-old North American Free Trade Agreement, which Trump has long denigrated as a “disaster.”

Trump appeared with Canadian Prime Minister Justin Trudeau and outgoing Mexican President Enrique Pena Nieto at the Group of 20 nations summit in Buenos Aires for the formal signing ceremony. Each country’s legislature must also approve the agreement.

Legislative approval is the next step, but could prove to be a difficult task in the United States, especially now that Democrats — instead of Trump’s Republicans — will control the House of Representatives come January. Democrats and their allies in the labor movement are already demanding changes to the agreement.

Within hours of the signing, Senate Democratic Leader Chuck Schumer said the deal must have stronger labor and environmental protections in order to get majority support in Congress and “must prove to be a net benefit to middle-class families and working people.”

The three countries agreed to the USMCA just hours before a U.S.-imposed Sept. 30 deadline. Many trade analysts say the successor to NAFTA isn’t all that different from the original one, despite Trump’s claim that it would “transform North America back into a manufacturing powerhouse.”

Trudeau said the deal “lifts the risk of serious economic uncertainty” and said Canada worked hard for a “new, modernized agreement.” But he also used the ceremony to call on Trump to remove steel and aluminum tariffs the U.S. slapped on Canada and Mexico. Trudeau also referenced recent downsizing moves by GM in North America as a “heavy blow.”

Pena Nieto, who will hand off to his successor Saturday, said he was honored to be at the signing on the final day of his administration, calling it the culmination of a long process “that allow us to overcome differences and to conciliate our visions.”

Trump is describing USMCA as a landmark trade agreement. But most companies are just relieved that it largely preserves the status quo established by NAFTA: a regional trade bloc that allows most products to travel between the United States, Canada and Mexico duty free. During the contentious negotiations that led to the USMCA, Trump repeatedly threatened to pull out altogether.

Such a move would have disrupted businesses that have built complicated supply chains that straddle the borders of the three countries.

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