The newly forged North American Free Trade Agreement (Nafta) has been now formally signed by the US President Donald Trump and appropriate representatives from the other two parties Canada and Mexico.
The new or the rehashed deal has been given the official name of the United States-Mexico-Canada Agreement, or USMCA.
During his 2016 Presidential election campaign, renegotiation of the Nafta deal was one of the major poll promises that had been made by Trump. Following the new trade agreement, Trump claimed that the update “changes the trade landscape forever”.
More than $1tn worth of trade between the countries would be governed by the USMCA
“The terrible NAFTA will soon be gone. The USMCA will be fantastic for all!” tweeted Trump shortly after the signing the new rehashed trade agreement.
Trade representatives from the three partner countries have been renegotiating the deal for more than a year now and the deal has been stuck for a long time because of disagreement over views and issues on new car and dairy industry regulations.
Ever since he had taken office as the President of the US and till such time that he was assured of a favourable deal, Trump had continuously threatened to pull the US out of the Nafta if the country was not given a proper and better deal.
But following the agreement in principle for rehashed agreement, Mexican President Pena Nieto called the deal to a “win-win-win.”
But there was less enthusiasm shown by Canadian Prime Minister Justin Trudeau in relation to the new trade agreement on Friday. He however said that the threat of “serious economic uncertainty” that “would have gotten more damaging” would be resolved by the USMCA.
Canadian and Mexican steel and aluminium being imported into the US were slapped with additional tariffs by President Trump in May this year.
Both the leaders now should work together to reduce those trade tariffs on steel and aluminium, Trudeau told Trump during the signing of the deal.
The USMCA would have to be ratified by politicians and parliamentarians from al of the countries for it to be implemented.
According to head of the World Trade Organization, Roberto Azevedo, the worst crisis is being faced by the post-war multilateral trading system.
While not taking names, he cautioned about the possible impacts and outcomes in a television interview with the BBC and indicated that Trump’s aggressive and combative attitude towards trade and the policy approach that he is taking is at the core of his concerns.
Azevedo was also worried about the signing of the deal to replace the North American Free Trade Agreement – which is but just one of the issues of concern for him. There are plenty more. The continuing trade tensions between the US and China is certainly one of them.
And there has been a like warm response to the new Nafta deal even though most analysts expect the deal to be easily approved in Canada and Mexico.
According to the Democrats, this new deal does not contain enough provisions that can ensure environment protection or prevent US companies from relocating jobs in lower-cost Mexico.
(Adapted from BBC.com)