President Donald Trump on Monday hailed a US trade pact with Canada and Mexico, which replaces the old Nafta deal, as a historic agreement set to turn North America back into a “manufacturing powerhouse” and fuel US economic expansion.
Governing almost $1.2 trillion in trade, the pact known as the US-Mexico-Canada Agreement, or USMCA, is “the most important trade deal we’ve ever made by far”, Trump told a White House press conference.
Trump’s aggressive tearing up of long-standing US trade deals – with everyone from its two huge neighbours to China and the EU – has rattled world leaders and sparked fears of economic turmoil.
“The US in its trade deals has lost on average almost $800 billion a year. That’s dealing with China, dealing with EU, with everybody, Japan, Mexico, Canada, everybody,” he said.
USMCA is said by analysts to be similar to Nafta in many respects but there is improved access for US agricultural goods, including the dairy products which Canada in particular had tried to limit.
New rules are designed to improve US auto workers’ competitiveness, with 40 per cent of each car required to have been made by people earning at least $16 an hour. The US had also sought increased American content for duty-free autos.
“It will transform North America back into a manufacturing powerhouse,” he said. USMCA will “allow us to reclaim a supply chain that has been off-shored to the world because of unfair trade issues.”
Mexican President-elect Andres Manuel Lopez Obrador embraced the new deal.
“I must admit, I insist, that President Donald Trump had an open, tolerant attitude,” the leftist politician said.
The pact must still be approved by the Mexican senate, where the coalition with which he won the elections last July has a comfortable majority.
Canadian prime minister Justin Trudeau said Monday that the deal overall would be “profoundly beneficial for our economy” and “the most important progressive reform for North American workers in a generation.”
For Trump, the USMCA is only the start of what he says is a global pushback against countries taking advantage of the US economy.
Talking up the new accord, Trump declared it a “privilege” for foreign powers to do business with the US.
“And I’m not talking about Mexico, Canada. I’m talking about everybody. Everybody,” he said.
Trump said his strategy was bearing fruit. “China wants to talk very badly,” he said.
Likewise, he claimed that India – which he described as the “tariff king” – wants to start trade talks with the US “immediately”.
In Trump’s view, the new deal and promise of more around the world shows that he has kept his campaign promise of putting “America first”.
But a Democrat-controlled Congress “might be willing to throw one of the great deals for people and the workers. They may be willing to do that for political purposes”, he said.
Trump said he’d like to see it signed by the end of November. US law requires the White House to submit the text to Congress 60 days before signing.
Under Sunday’s deal, the trade pact will remain in force for 16 years but will be reviewed every six years.
Stock markets rose on news of the agreement, with the Dow Jones in New York up 1.0 per cent in late morning, just shy of a record high.