After a highly elongated, turbulent renegotiation process, Canada has reached a tentative deal with the United States and Mexico to continue the 24-year-old North American Free Trade Agreement (NAFTA).
Canadian and US negotiators came to an agreement just hours before the self-imposed midnight deadline, according to a CNN report.
The trade impasse was overcome after both parties made some concessions, with Canada agreeing to grant US farmers greater access to its dairy market and limit its automotive exports to the US.
In exchange, US negotiators have agreed to retain Chapter 19, the dispute resolution mechanism of NAFTA, and exemptions for Canadian creative industries.
It is unclear at this time whether the new NAFTA includes a sunset clause, as US negotiators previously stated they wanted an automatic end to NAFTA every five years unless the terms of the deal are renegotiated.
Now that a tentative deal has been reached, the US Congress is required to go through a 60-day review of the draft agreement, which could potentially allow for NAFTA’s re-signing around December 1.
US negotiators reached a bilateral trade deal with Mexico late last month.
Official details on the new NAFTA deal, already being reffered to as the US-Mexico-Canada deal, or USMCA, are anticipated Monday.
Amidst a trade war and rising rhetoric from the White House, there have been some doubts about whether Canada would be able to reach an agreement with the US, adding to earlier threats from President Donald Trump that he would cancel NAFTA if a deal highly favourable to the US was not reached.
“They used to call it NAFTA,” said Trump after a deal was reached with Mexico. ”We’re going to call it the US-Mexico Trade Agreement.”
Earlier this month, Trump went as far as saying he could cause the “ruination” of Canada if he applied a 20% tariff on Canadian automotive exports.
“In some countries, including Canada, a tax on cars would be the ruination of the country. That’s how big it is. The ruination of the country,” he said, going on to call NAFTA “the worst trade deal ever.”
And last week, Trump claimed he rejected a request from Trudeau for a one-on-one meeting to discuss NAFTA, but the Prime Minister’s Office said no such request was ever made.
With files from Simran Singh.