US dairy farmers see new hope in new trade deal

03 Octobre, 2018, 05:08 | Auteur: Anatole Charbonneau
  • US dairy farmers see new hope in new trade deal

The main goal of the agreement for the United States is to have more vehicle and truck parts made in North America.

As he announced the key elements of the US-Mexico and Canada Agreement or USMCA, the President listed out trade deals that are under negotiations, including with Japan, the European Union, China and India.

The North American trade war is over! "We look forward to further deepening our close economic ties when this new agreement enters into force". The existence of NAFTA text that largely satisfied most parties gave negotiators solid ground to build on, but no such ground exists for the US relationship with China. Also, two of NAFTA's three original multiparty trade dispute resolution processes will remain in place (which is good for future intra-North American relations).

Tariffs on imported steel have hit the construction industry nationwide but the newly-minted trade deal between the US and Canada may not provide the needed relief, at least not immediately.

A protectionist policy under the Mr Trump has seen the U.S. forge ahead with individual trade deals, rejecting bigger multi-lateral trade agreements and posing a challenge to decades of global free trade.

A senior administration official, who asked not to be named, tells the Post that the deal includes better protection for labor rights, the environment and intellectual property than trade deals made under the Obama administration. To meet that deadline, the text of the agreement had to be submitted to Congress before October.

When US officials asked Indians why they wanted to have a trade deal with America, Indian officials told them that they wanted to keep the US President happy, Trump told reporters. "It was part of Canada's concession to the us, to show Trump and co. that Canada can be counted on as an ally in dealing with China", he said. Under Canada's supply-managed dairy system, Ottawa effectively sets production quotas and the price of milk, which raises prices to consumers but provides farmers with a stable income.

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A spokesman for Jim Carr, Canada's new minister for global trade diversification, said nothing that Canada agreed to in the USMCA would hamper the ability to pursue trade a trade agreement with China. "I've always felt that this would be a trade coalition of the willing to send a message to China that they've got to shape up and start behaving like a citizen in the new world of trading", Kudlow said.

It also expands US access to up to 3.75 percent of the Canadian dairy market (versus 3.25 percent in the Trans-Pacific Partnership agreement the Obama administration negotiated but Trump nixed his first week in office). "Second, the pricing system allowed for Canada to be competitive to export their excess skim milk powder, taking away market share from the U.S".

For now, US steel and aluminum tariffs on Canada and Mexico remain in place subject to future talks but these are likely to be resolved. "No matter what. If it's the single greatest agreement ever signed, they'll say, 'Well, you know, Trump likes it, therefore we're not going to approve it because that would be good for the Republicans".

The agreement must then be ratified by the legislatures of each of the signing countries before it would take effect and replace NAFTA.

Canada had resisted American moves to remove the provision, keen to be able to challenge USA trade penalties.

Speaking at the White House, the President said the United States-Mexico-Canada Agreement (USMCA) vindicated his threats over tariffs. However, he believes the provision is meant as more a reasonable consultation within Canada's most-important trade alliance, than an attempt to block any Canada-China trade deals.

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