Canada and the U.S. have reached a tentative deal to overhaul the North American free-trade agreement after intensive weekend talks, trading access to Canada’s protected dairy market for the preservation of a key dispute-resolution system and exemption from threatened auto tariffs.
President Donald Trump signed off on the agreement late Sunday night, said four sources with knowledge of the closed-door negotiations. Prime Minister Justin Trudeau convened a late Sunday cabinet meeting at his office in Ottawa. The Mexican Economy Ministry, meanwhile, said it presented text of the preliminary deal to the Mexican Senate.
NAFTA will be renamed the United States-Mexico-Canada Agreement – or USMC, with the United States posting the text of the agreement online. Mr. Trump had previously indicated he wanted to do away with the phrase “NAFTA.”
In a statement late Sunday, Foreign Affairs Minister Chrystia Freeland confirmed that Canada and the United States had settled upon a “new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement.”
Canada preserved the Chapter 19 dispute settlement provision, satisfying Mr Trudeau’s long-standing red line in the negotiations. The deal will also keep in place protections for Canadian cultural industries.
Mr Trump, for his part, gained the right for American farmers to sell more products into Canada’s tightly-controlled supply managed dairy system, his major trade complaint with Canada over the last year and a half.
A side agreement would see the Trump administration guarantee it will not impose tariffs on most auto imports from Canada.