Canada and America reach agreement to save NAFTA
The United States and Canada signed a last-minute deal to salvage the North American Free Trade Agreement (NAFTA) as a tripartite agreement with Mexico, taking into account a $ 1.2 trillion free trade zone that was about to collapse after nearly 25 years.
US President Donald Trump's main aim to restructure NAFTA was to reduce his country's trade deficit, a goal he also sought with China by charging hundreds of billions of dollars in customs duties on goods from China.
While the agreement between the United States, Canada and Mexico avoids the imposition of customs duties, it will increase global car manufacturers' difficulty in manufacturing cheap cars in Mexico. The agreement also aims to create more jobs in the United States.
A source familiar with the decision said Trump had agreed to the agreement with Canada. A senior US official said US officials planned to sign the deal with Canada and Mexico at the end of November before being brought to Congress for approval.
The agreement will keep a dispute resolution mechanism that Canada has strived to preserve to protect Canada's timber sector and other sectors from US anti-dumping duties, according to Canadian sources.
Canada has agreed to allow dairy farmers in the United States access to about 3.5 percent of the Canadian domestic dairy market with an annual investment of about $ 16 billion.
Although Canadian sources said the government was ready to make reparations, the dairy producers' reaction was angry.
The agreement also requires a higher proportion of car components than North American regions and a minimum wage of $ 16 per hour, which is intended to divert jobs from Mexico.
Canada and Mexico agreed to a 2.6 million-passenger car export to the United States if Trump imposed a 25 percent tariff on cars on national security grounds.
But the agreement did not put a solution to US tariffs on Canada's steel and aluminum exports.