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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/oct/01/nafta-trade-deal-nikkei-manufacturing-uk-eurozone-business-live
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| Japanese Nikkei hits 27-year high as markets cheer Nafta deal – business live | Japanese Nikkei hits 27-year high as markets cheer Nafta deal – business live |
| (35 minutes later) | |
| Canada’s farmers don’t believe Justin Trudeau’s claim that the USMCA deal is “good for Canada”. | |
| They’re deeply unhappy that American farmers will get more access to Canadian consumers, and fear it will cost jobs. | |
| Pierre Lampron, president of Dairy Farmers of Canada, says: | |
| Granting an additional market access of 3.59% to our domestic dairy market, eliminating competitive dairy classes and extraordinary measures to limit our ability to export dairy products will have a dramatic impact not only for dairy farmers but for the whole sector. | |
| This has happened, despite assurances that our government would not sign a bad deal for Canadians. We fail to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood. | |
| Donald Trump may be delighted, though. He’s long criticised Canada’s swathe of protections for its dairy industry, which guarantee prices for producers and restrict milk imports from overseas. | |
| We don’t yet know exactly what USMCA will entail (US officials have only said it includes “a host of provisions” to “rebalance” trade). | |
| Robin Bew of the Economist Intelligence Unit fears it won’t be an improvement on NAFTA (which cut a swath of trade barriers between its members). | |
| #Canada agrees trade deal which means #NAFTA will be replaced by new 3 way scheme with #US #Mexico. No details yet but sounds as if the price was opening up the Canadian dairy industry. We are ready know from the Mexico part, however, that new trade rules worse than NAFTA was | |
| Adam Cole of Royal Bank of Canada concurs, saying: | |
| Details of the deal are still incomplete, though it appears Canada has conceded greater access to dairy markets and tighter rules of origin for cars. In return, the US has granted Canada limited guaranteed exception in the event of broader tariffs on car imports and the Chapter 19 dispute resolution mechanism remains unchanged. | |
| But Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo, reckons the deal should boost optimism: | |
| “Though markets were already anticipating an agreement, one source of worry will be swept away if a deal is made,” | |
| “That will lead to a rise in trust in the U.S. economy, so it’s easy for risk sentiment to improve.” | |
| The Canadian dollar and the Mexican peso are both rallying, on the back of the USMCA deal. | The Canadian dollar and the Mexican peso are both rallying, on the back of the USMCA deal. |
| The Canadian dollar, or ‘loonie’, has jumped to a four-month high, touching C$1.2887 per dollar for the first time since May. | The Canadian dollar, or ‘loonie’, has jumped to a four-month high, touching C$1.2887 per dollar for the first time since May. |
| The peso gained 0.5% cent to over 18.63 pesos per dollar, its highest since August, as trade war fears ebbed away. | The peso gained 0.5% cent to over 18.63 pesos per dollar, its highest since August, as trade war fears ebbed away. |
| The Canadian dollar firmed to a four-month high after reports Canada and the US had reached an agreement on how to revamp Nafta https://t.co/aszyHLhvBD pic.twitter.com/0euzA3sCL1 | The Canadian dollar firmed to a four-month high after reports Canada and the US had reached an agreement on how to revamp Nafta https://t.co/aszyHLhvBD pic.twitter.com/0euzA3sCL1 |
| Jasper Lawler of London Capital Group says: | Jasper Lawler of London Capital Group says: |
| The trilateral agreement brings an end to months of uncertainty surrounding North American trade. The resultant risk on sentiment has seen equity futures rally strongly overnight. | The trilateral agreement brings an end to months of uncertainty surrounding North American trade. The resultant risk on sentiment has seen equity futures rally strongly overnight. |
| The S&P futures are back towards record territory, whilst the safe haven yen tumbled to a fresh year to date low versus the dollar. | The S&P futures are back towards record territory, whilst the safe haven yen tumbled to a fresh year to date low versus the dollar. |
| Boom! Japan’s benchmark stock index, the Nikkei, has hit its highest level since 1991. | Boom! Japan’s benchmark stock index, the Nikkei, has hit its highest level since 1991. |
| The Nikkei gained 0.5% today, closing at 24,245 -- its best level in 27 years. | The Nikkei gained 0.5% today, closing at 24,245 -- its best level in 27 years. |
| Markets across Asia were boosted by reports that the US and Canada had agreed a new trade deal. | Markets across Asia were boosted by reports that the US and Canada had agreed a new trade deal. |
| BREAKING Japan’s Nikkei 225 index closes at highest level since November 1991 pic.twitter.com/NmRNn4KvKi | BREAKING Japan’s Nikkei 225 index closes at highest level since November 1991 pic.twitter.com/NmRNn4KvKi |
| Shares also got a lift from the recent weakness of the yen. It hit a one-year low against the US dollar today, which should help exporters and lift profits. | Shares also got a lift from the recent weakness of the yen. It hit a one-year low against the US dollar today, which should help exporters and lift profits. |
| However, the Nikkei is still a long way below its previous all-time high, at the end of the boom in 1989. | However, the Nikkei is still a long way below its previous all-time high, at the end of the boom in 1989. |
| #Japan's Nikkei 225 closes at highest level since November 1991 BUT it is still a long way to the all-time high. pic.twitter.com/YhUsmzkWyD | #Japan's Nikkei 225 closes at highest level since November 1991 BUT it is still a long way to the all-time high. pic.twitter.com/YhUsmzkWyD |
| Canadian PM Justin Trudeau told reporters that “It’s a good day for Canada,” after his cabinet backed the new USMCA deal -- even though his nation’s farmers will now face more competition from US rivals. | Canadian PM Justin Trudeau told reporters that “It’s a good day for Canada,” after his cabinet backed the new USMCA deal -- even though his nation’s farmers will now face more competition from US rivals. |
| .@trudeau leaves cabinet meeting on new NAFTA deal declaring that it’s a “good day for Canada.” pic.twitter.com/MQo3DYgPMX | .@trudeau leaves cabinet meeting on new NAFTA deal declaring that it’s a “good day for Canada.” pic.twitter.com/MQo3DYgPMX |
| Jesús Seade, top Nafta negotiator for Mexico’s President-elect Andrés Manuel López Obrador, has tweeted that USMCA will provide “certainty and stability to trade in Mexico”. | Jesús Seade, top Nafta negotiator for Mexico’s President-elect Andrés Manuel López Obrador, has tweeted that USMCA will provide “certainty and stability to trade in Mexico”. |
| Celebramos el acuerdo trilateral. Se cierra la puerta a la fragmentación comercial de la región. TLCAN 2 dará certidumbre y estabilidad al comercio de México con sus socios en Norteamérica. Gran satisfacción haber representado a @lopezobrador en este proceso. Enhorabuena a todos. | Celebramos el acuerdo trilateral. Se cierra la puerta a la fragmentación comercial de la región. TLCAN 2 dará certidumbre y estabilidad al comercio de México con sus socios en Norteamérica. Gran satisfacción haber representado a @lopezobrador en este proceso. Enhorabuena a todos. |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| The world has taken a step back from a damaging global trade war, after Canada and the United States reached a deal on reforming the North American Free Trade Agreement (NAFTA). | The world has taken a step back from a damaging global trade war, after Canada and the United States reached a deal on reforming the North American Free Trade Agreement (NAFTA). |
| After a nail-biting weekend of talks, negotiators from both countries managed to hammer out a new deal, dubbed the United States-Mexico-Canada Agreement. | After a nail-biting weekend of talks, negotiators from both countries managed to hammer out a new deal, dubbed the United States-Mexico-Canada Agreement. |
| USMCA doesn’t trip off the tongue like NAFTA, but that didn’t stop Justin Trudeau’s cabinet signing the deal off shortly before midnight in Washington, to avoid trade relations with the US being poisoned. | USMCA doesn’t trip off the tongue like NAFTA, but that didn’t stop Justin Trudeau’s cabinet signing the deal off shortly before midnight in Washington, to avoid trade relations with the US being poisoned. |
| Robert Lighthizer, US trade representative, and Chrystia Freeland, Canada’s foreign minister, both declared victory. In a joint statement, they said: | Robert Lighthizer, US trade representative, and Chrystia Freeland, Canada’s foreign minister, both declared victory. In a joint statement, they said: |
| “USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region. | “USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region. |
| It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.” | It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.” |
| Canada has made some concessions, including removing help for its dairy farmers, in return for protections for its car industry. | Canada has made some concessions, including removing help for its dairy farmers, in return for protections for its car industry. |
| Reuters explains: | Reuters explains: |
| The deal will preserve a trade dispute settlement mechanism that Canada fought hard to maintain to protect its lumber industry and other sectors from US anti-dumping tariffs, Canadian sources said. | The deal will preserve a trade dispute settlement mechanism that Canada fought hard to maintain to protect its lumber industry and other sectors from US anti-dumping tariffs, Canadian sources said. |
| But this came at a cost. Canada had agreed to provide US dairy farmers access to about 3.5% of its approximately $16bn annual domestic dairy market, the sources said, adding that the Canadian government was prepared to offer compensation to dairy farmers hurt by the deal. | But this came at a cost. Canada had agreed to provide US dairy farmers access to about 3.5% of its approximately $16bn annual domestic dairy market, the sources said, adding that the Canadian government was prepared to offer compensation to dairy farmers hurt by the deal. |
| The influential Dairy Farmers of Canada lobby group – which strongly opposes the idea – said in a statement that it insisted “any final Nafta deal should have no further negative impact on the dairy sector”. | The influential Dairy Farmers of Canada lobby group – which strongly opposes the idea – said in a statement that it insisted “any final Nafta deal should have no further negative impact on the dairy sector”. |
| Canada also agreed to a quota of 2.6m vehicles exported to the US in the event that Trump imposed 25% global autos tariffs on national security grounds, a side letter to the agreement showed. | Canada also agreed to a quota of 2.6m vehicles exported to the US in the event that Trump imposed 25% global autos tariffs on national security grounds, a side letter to the agreement showed. |
| The quota would allow for significant growth in tariff-free automotive exports from Canada above current production levels of about 2 million units, safeguarding Canadian plants. | The quota would allow for significant growth in tariff-free automotive exports from Canada above current production levels of about 2 million units, safeguarding Canadian plants. |
| The breakthrough should be welcomed in the markets, where worries over trade wars have weighed on sentiment for months. | The breakthrough should be welcomed in the markets, where worries over trade wars have weighed on sentiment for months. |
| Also coming up today | Also coming up today |
| New manufacturing data will show how UK and Eurozone factories fared in September. | New manufacturing data will show how UK and Eurozone factories fared in September. |
| Britain’s factory growth is expected to have slowed a little (the City expects the manufacturing PMI to drop to 52.5 from 52.8), while eurozone growth could be unchanged at 53.5. | Britain’s factory growth is expected to have slowed a little (the City expects the manufacturing PMI to drop to 52.5 from 52.8), while eurozone growth could be unchanged at 53.5. |
| The agenda: | The agenda: |
| 9am BST: Eurozone manufacturing PMI for September | 9am BST: Eurozone manufacturing PMI for September |
| 9.30am BST: UK manufacturing PMI for September | 9.30am BST: UK manufacturing PMI for September |
| 10am BST: Eurozone unemployment figures for August | 10am BST: Eurozone unemployment figures for August |
| 3pm BST: US manufacturing PMI for September | 3pm BST: US manufacturing PMI for September |