Foreign Minister Chrystia Freeland arrives with Prime Minister Justin Trudeau to discuss the United States Mexico Canada Agreement (USMCA) in Ottawa on October 1, 2018.
The U.S. -Mexico-Canada Agreement (USMCA), which will replace the North American Free Trade Agreement if the three countries' legislatures approve it, was finalized late Sunday after a long negotiating process made uncertain by the mercurial nature of the administration of U.S. President Donald Trump.
"Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement (USMCA)", said U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland in a joint statement.
One key difference: the USCMA would allow USA dairy farmers more access to the Canadian market, particularly with milk powder.
Trump is claiming a win over an eleventh-hour trade deal with Canada which he has labelled the "most important trade deal we've made". It also offers Mexico and Canada partial protection from broader auto tariffs the Trump administration has threatened to impose, but falls short of marking those countries exempt.
The deal is likely to boost global stock markets today, which have been dragged down by concerns about United States trade disputes with China, the European Union and others. If Congress-which may look very different after the looming midterms-fails to ratify the USMCA, it can't enter into force.
"The threat of capricious auto tariffs has been lifted, stabilizing future investment" said Dias in a statement.
After months of bashing its Western allies on trade, the Trump administration is now trying to recruit them to join the United States in pressuring China to shift its trade, subsidy and intellectual property practices to a more-market driven focus.
"The deal is far from ideal, but other, decidedly more negative potential outcomes - such as Canada's exclusion from a revised agreement, a "zombie" NAFTA, and steep tariffs on Canadian auto exports to the US - have likely been avoided", he wrote in an analysis Monday.
Still, at least one trade expert said the deal was far from ideal, but needed to be done.
USA dairy groups said that while Canada "will remain a largely self-contained, protected milk market" under the USMCA, there would be opportunities to expand sales to Canadian consumers and processors.
US drug companies will also now be able to sell products in Canada for 10 years before facing competition from generics, up from eight years.
"We've been sacrificed", he said in an interview. Mexico is the No. 1 market for USA pork exports and Canada is No. 4.
Separately, negotiators agreed to update labor and environmental standards, which were not central to the 1994 accord and are now typical in modern trade agreements. "India, which is the tariff king, they called us and they said, "we want to start negotiations immediately".".
"I then will submit it for approval to Congress where, in theory, there should be no trouble, but anything you submit to Congress is trouble", Trump said.
Ahead of the weekend's talks, several lawmakers had warned that they would not support a deal without Canada.
He has adopted an "America First" policy and launched a trade war against China, as well as imposed tariffs on steel and aluminium imports from Mexico and Canada.
Beijing has demanded that the World Trade Organization recognize it as a "market economy" since its WTO accession agreement expired in December 2016, a move that would severely limit Western trade defenses against cheap Chinese goods.
"This is going to be one of the most enforceable trade agreements we've ever had", one official said.