USA and Canada reach trade agreement
The United States and Canada reached a deal to salvage NAFTA as a trilateral pact with Mexico, beating a midnight deadline.
It will boost American access to Canada's dairy market and protect Canada from possible U.S. auto tariffs, sources with direct knowledge of the talks said.
President Donald Trump had threatened to splinter the nearly 25-year-old North American Free Trade Agreement into a bilateral pact with Mexico and tax Canadian vehicle exports to the United States if Ottawa had failed to sign on before a midnight Sunday deadline.
But Trump has approved the "framework" deal with Canada, a source familiar with the decision said, just days after he sharply criticized Canadian Prime Minister Justin Trudeau and his NAFTA negotiating team.
Trump blames NAFTA for the loss of American manufacturing jobs and wants major changes to the pact, which underpins $1.2 trillion in annual trade. Markets fear its demise would cause major economic disruption.
Negotiators from both sides spent two days talking by phone as they tried to settle a range of difficult issues such as access to Canada's closed dairy market and U.S. tariffs.
The deal will preserve a trade dispute settlement mechanism that Canada fought hard to maintain to protect its lumber industry and other sectors from U.S. anti-dumping tariffs, Canadian sources said.
But this came at a cost.
Canada had agreed to provide U.S. dairy farmers access to about 3.5 percent of its approximately $16 billion annual domestic dairy market, the sources said, adding that the Canadian government is prepared to offer compensation to dairy farmers hurt by the deal.
Published: by Radio NewsHub