Published: Tue, October 02, 2018
Markets | By Noel Gibbs

Donald Trump says new trade deal is 'most important ever'

Donald Trump says new trade deal is 'most important ever'

A day after claiming that India wants a trade deal with the US, President Donald Trump on Monday said that he has spoken to the Indian government over tariffs and was assured that they would be reduced substantially.

President Trump, however, says he is not hopeful the next deal will be approved by Congress in the next year, saying 2020 election politics could hold up passage.

On the matter of Section 232 tariffs, Trump's trade weapon of choice, USA officials told a late-night conference call with reporters that the two sides had "reached an accommodation" on the issue.

Most critical of the deal was the dairy industry, which railed against expanded USA access to the domestic dairy market and the elimination of competitive dairy classes.

Trump said the Nafta rewrite would not have been reached without tariffs, adding that, even though possible tariffs have given the USA strong trade leverage, the country may not need to use them.

"We will be manufacturing many more cars", Trump said.

The deal, reached late Sunday, will govern $1.2 trillion United States in trade, making it the biggest agreement in the country's history, and marks the end of an era during which the USA has been "treated so badly" on trade by other countries around the world, the president said.

Juan Carlos Baker, Mexico's under secretary of foreign trade, is expected to present the details of the agreement to the Mexican senate, according to the Times.

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Trump acknowledged the relationship did get "a little bit testy" but that the trade deal has smoothed over their differences. He sent his "highest regards" to Trudeau, and said that the new deal has created a great partnership with Mexico and Canada.

Trump embraced the U.S. -Mexico-Canada Agreement during a Rose Garden ceremony, branding the pact the "USMCA".

The U.S. and Canada reached the basis of a free trade deal Sunday night, a senior Canadian government official said.

Under US law, the White House is required to submit the text of the trade deal to Congress 60 days before signing - and officials barely made it by midnight.

Following years of threats from Trump and the promise of establishing a new deal more favorable to the US, the latest agreement appears to represent a win for the White House. Americans avoided a 25 percent tariff on Canadian-made cars, but may still see an increase in prices because of new manufacturing and labor agreements.

Trump said he plans to sign the new agreement by end of November.

The president said he was having a "successful negotiation" with the EU. That's a victory for US dairy farmers, but could provoke some political turmoil for the Canadian government.

In Ottawa, PMO officials said there would be another cabinet meeting Monday and a news conference likely as well.

"We think we could easily be one of the first countries to have an agreement once [the United Kingdom has] the legal authority to start negotiating", he said.

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Former prime minister Brian Mulroney welcomed news of an agreement in a statement Monday, calling it a "highly significant achievement for Canada, while benefiting all three countries as it should".

"To me it seems like it's a stonewashed and ripped NAFTA, if you will, rather than a modernized agreement", Hugo Perezcano Díaz, a director at the Center for International Governance Innovation and a former trade official for the Mexican government, said.

Realistically, Canada was never going to make big gains in these negotiations and simply walking away was a fantasy.

Canada and Mexico are the United States' two biggest export markets.

So much American trade depends on the 1994 deal that USA financial markets were jittery about a possible collapse of negotiations - and because Mr. Trump made campaign promises to get rid of NAFTA. Dale notes that Canada sends only about 1.8 million automobiles to the United States annually, meaning the agreement would leave the Canadian auto industry unscathed, and with some wiggle room for good measure. US drug companies can fend off generic competition for a few more years.

Trump said it was unfair and economically crippling to dairy farmers. Under the new agreement, three-quarters of a car's parts must originate from North America in order to be exempt from duties. But the howls from the industry are way out of proportion to the real impact: it still amounts to giving the Americans access to only 3.6 per cent of the Canadian market.

"The agreement will govern almost $1.2 trillion in trade, which makes it the biggest trade deal in United States history", Trump said.

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