NAFTA to be replaced by new trade deal between Canada & the U.S.

The United States and Canada have recently agreed on a new trade deal to replace the current North American Free Trade Agreement (NAFTA). As per trusted sources, the new deal has been deemed as the United States-Mexico-Canada Agreement (USMCA) and is expected to would allow efficient trade between the involved region’s dairy and automotive sectors.

According to the BBC, U.S. Trade Representative, Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said in a joint statement that that the agreement will give the region’s farmers, workers, ranchers and businesses a high-standard trade agreement that will result in fair trade, freer markets, and robust economic growth in its regions.

A senior U.S. administrative official said that the deal will re-balance their trade relationship with Canada and Mexico highlighting new rules on the origin of automobiles, and market access to Canada’s dairy sector. The deal will also modernize provisions on digital trade and intellectual property which once were covered by NAFTA.

A U.S. official, referring the deal as one of the most enforceable trade agreements ever made, said that the new trade agreement will change the lives of people across the involved countries, and will also make the U.S. a much better and stronger economy.

Senate Finance Committee Ranking Member, Sen. Ron Wyden, D-Ore was reportedly quoted saying that the NAFTA has long needed a serious revamp. A new NAFTA, or any new trade agreement, is significantly tested based on whether the agreement is enforceable, specifically with respect to promises to protect environmental and worker rights, Wyden added.

Sources familiar with the matter suggest that the deal will enable U.S. farmers to have access to about 3.5% of Canada’s dairy market, while Canada will secure some protection for its automobile industry against impeding U.S. tariffs. However, U.S. tariffs on aluminum and steel are likely to remain the same.