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 United States-Mexico-Canada Agreement, or USMCA, is “the most important trade deal we’ve ever made by far,” Trump told a White House press conference.
The agreement first announced late Sunday, just before a midnight deadline, ended more than a year of tense negotiations sparked by Trump’s decision to scrap the quarter-century old North American Free Trade Agreement.
Trump’s aggressive tearing up of long-standing US trade deals — with everyone from its two huge neighbours to China and the European Union — has rattled world leaders and sparked fears of economic turmoil.
But in a buoyant performance at his Rose Garden news conference, Trump said the approach of using harsh tariffs to force countries into renegotiating unfair deals had been vindicated.
“The United States in its trade deals has lost on average almost $800 billion a year. That’s dealing with China, dealing with European Union, with everybody, Japan, Mexico, Canada, everybody,” he said.
“We’re not going to allow that to happen.”
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 percent 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.
Trump said the new framework will encourage US companies to hire at home, rather than look abroad.
“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 has embraced the new deal, his incoming foreign minister said.
“It will allow us to maintain the competitiveness of the Mexican manufacturing industry, which will keep its access to the world’s largest market,” Marcelo Ebrard told a press conference.
Canadian Prime Minister Justin Trudeau faces anger from dairy farmers but told journalists 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.”
Stock markets rose on news of the agreement, with the Dow Jones in New York up 1.0 percent in late morning, just shy of a record high.
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 United States.
“And I’m not talking about Mexico, Canada. I’m talking about everybody. Everybody,” he said.
“It’s a privilege for China to do business with us. It’s a privilege for the European Union.”
Pointing to his combative attitude towards China — which is now locked in an escalating trade war with the United States — 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 United States “immediately.”
He also called out Brazil, Latin America’s biggest country, as a chief offender, “a beauty.”
In all three countries, the new USMCA trade pact must be ratified by lawmakers.
Trump immediately set about selling the idea to voters ahead of November congressional elections that could see the legislature taken by Democrats, putting approval for USMCA at risk.
In Trump’s view, the new deal and promise of more around the world show that he has kept his campaign promise of putting “America first.”
“As I say, the United States is respected again,” he told the press conference.
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.
The AFL-CIO, a Washington-based federation representing millions of unionized employees, said it was too early to “make a final judgment” on the new deal’s impact on working people.
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.