It was a campaign promise of Donald Trump, the new free trade agreement linking the United States, Canada and Mexico entered into force on Wednesday, at a time when the borders between the three countries are partially closed because of pandemic COVID-19.
Travel non-essential between the three countries are in effect banned until the 21 of July to deal with the new coronavirus. The flow of goods, nonetheless, continue to circulate.
Not only the ACEUM agreement (Canada, Usa, Mexico) takes effect in a particular context, but still it is far from eliminate all areas of friction between the three partners, whose economies have become interdependent over time.
“It looks more like a temporary truce with the administration to Trump that of a return to the stability of the north american business,” says Edward Alden, an expert in international trade at the Council on Foreign relations.
And trade tensions may resume at any time with an american president returned to campaign for his re-election in November.
On 17 June, prior to the entry into force of the treaty, the us trade representative (USTR), Robert Lighthizer, who himself negotiated the ACEUM, had also warned, in front of the Congress, that the administration Trump was willing to take measures as “often” as necessary to challenge any violations of the new agreement.
Its teams will closely monitor the issue of trade in dairy products, the longstanding dispute between farmers in the u.s. and canada.
For Mexico, Mr. Lighthizer had taken note of the existing disputes, stating the refusal of Mexico to approve the new imports of GMO products us these past two years.
The ACEUM, obtained after a standoff diplomatic, ratified the end of 2019, replaces the NAFTA (free trade agreement north american), which dated back to 1994 and who was unanimously considered obsolete.
“It is a change monumental,” responded Wednesday by Robert Lighthizer, under “approaches to modernisation which will create more jobs, a better protection of workers, expanded access to markets and greater trade opportunities for large and small businesses.” The final version of the treaty had been ratified by the end of 2019 after numerous amendments, under the impetus of the us democrats.
For the time being, the three countries can rejoice in the preservation of the principle of a large area of trade free trade of goods without customs duty.
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“Today marks the beginning of a new and much better chapter in trade between the United States, Mexico and Canada”, commented on Wednesday, USTR in a press release.
The republican president, who had described NAFTA as the “worst agreement” commercial in the history of the United States, had imposed its renegotiation few months after his arrival at the White House.
Accusing him of having destroyed thousands of jobs in the automotive sector because of the relocation of production to Mexico where labor is less expensive, it has finally obtained significant changes to the “rules of origin”, allowing the american industry to take a larger share in this industry.
With roughly 500 million inhabitants, this treaty is crucial for the three economies are now interdependent.
In 2019, trade between the three has, in effect, represented approximately 1,200 billion dollars.
And the gross domestic product of their combined economies representing about 27 % of global GDP.
“With the new NAFTA, we have been able to protect our cultural industries in the digital era and for the future, we could ensure better protection for our car industry”, said Monday the prime minister of canada, Justin Trudeau, during his daily press briefings.
He also delighted in the fact that his government had “failed to protect the privileged access that thousands and thousands of canadian businesses and millions of Canadians have the american market at a time of protectionism and uncertainty about the world trade”.
But he also spoke of the rumors that Donald Trump could réimposer of customs duties on aluminum canadian.
“Actually, we heard the proposals of concern in relation to rates the potential on the aluminium,” he said.
But it has been argued that the United States did not have enough production capacity and were in need of aluminium canada for their automotive industries and high technology.
In June 2018, with a full renegotiation of the NAFTA, Donald Trump had yet not hesitated to introduce customs duties punitive damages on the aluminum canadian, causing the astonishment of his ally history.
Sign of potential tensions, Robert Lighthizer said on Wednesday that “now, more than ever, the United States must stop the outsourcing of jobs and increase their production capacity and their investments here at home.”