Trade deal with Canada 'new dawn' for auto industry

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NAFTA is out, USMCA is in.

Ratifying the deal is likely to stretch into 2019 because once Trump and the leaders from Canada and Mexico sign the agreement, the administration and congressional leaders will need to write legislation to implement the deal and win passage in Congress.

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

"Though markets were already anticipating an agreement, one source of worry will be swept away if a deal is made", Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo, said.

WATCH above to hear Toronto Sun columnist Lorrie Goldstein break down the new NAFTA reboot with our host Mark Daniell and if Canada comes out a victor or loser out of this deal.

The deal, announced on Sunday, is a reworking of the 1994 North American Free Trade Agreement, which underpins US$1.2 trillion (S$1.6 trillion) in trade between the three countries.

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.

A similar agreement between Mexico and the USA preserves duty-free access to the US market for vehicles that comply with the agreement's rules of origin.

The deal opens up market access for USA farmers who want to bring dairy, eggs and poultry into Canada - what some in those supply-managed sectors are describing as a serious blow - but made no major concessions on the import and export of beef, pork and grain.

Despite the fact that Ottawa had long pushed back hard against allowing the deal to be periodically revisited, officials in the US briefing said the new language includes a provision that will indeed see the deal reviewed every six years.

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The measures in the new deal - which Mr Trump dubbed "US MCA" - "will support many - hundreds of thousands - American jobs". Under the new rules, only cars that are 75 percent made in North America will qualify to escape tariffs, up from 62 percent under NAFTA.

Trump campaigned in OH during the 2016 presidential race advocating for a renegotiated NAFTA deal.

Bothwell Cheese executive vice president Wally Smith says he is concerned about what increased market access will look like.

Canadian dairy farmers are angry.

"As I say, the United States is respected again", he told the press conference. This means more American products would be the shelves, potentially depressing demand for Canadian dairy products.

The access to Canada's dairy market will closely mirror what was given under recently negotiated agreements between Canada and the European Union and a separate one with Pacific countries, the Canadian official said. Over the years, Canada has successfully used Chapter 19 to challenge the United States on its softwood lumber restrictions.

It's unclear whether the new agreement includes not implementing the 25 percent steel tariffs Trump had threatened. "The true value of our industry I don't think has been taken into account and as a result, we are giving up additional access".

Trump said that it will be the most advanced trade deal in the world, with ambitious provisions on the digital economy, patents, financial services and other areas where the United States has a strong competitive advantage. This is slightly above the 3.25% market access Canada would have given the U.S. as part of the Trans-Pacific Partnership, which Trump pulled the United States out of past year.

"We are still trying to determine exactly what the economic implications of that would be for our company", Smith said.

"It is a great deal for all three countries", Trump said during an October 1 ceremony in the Rose Garden. Canada is by far the No. 1 destination for US exports, and the USA market accounts for 75 percent of what Canada sells overseas.