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Trump hails 'wonderful and historic' trade deal with Canada and Mexico - business live Trump hails 'wonderful and historic' trade deal with Canada and Mexico - business live
(35 minutes later)
Political scientist Ian Bremmer argues that the USMCA deal is a genuine breakthrough, which could help president Trump force Beijing into a new trade deal too:
New NAFTA (USMCA) agreement is the best trade news from Trump Administration to date.
If Trump now announces US will restart negotiations for TPP...he will be well set up for success in tough negotiations with China.
European stock market have all rallied today, on relief that the Nafta trade deal is being updated, not abandoned.
Shares have risen in London, Frankfurt, Paris and beyond...paving the way for a rally on Wall Street in a few hours.
David Madden of City trading firm CMC Markets says:
European equity markets have been boosted by the news that the US and Canada have struck a trade deal.
The agreement between US and Canadian trade delegates was struck just hours before the midnight deadline, and President Trump will be delighted that he managed to replace the North American Free Trade Agreement.
The Mexican component of the deal was reached in August and now that the Canadian element has fallen into place, bullish sentiment is sweeping across global markets.
Warm words from the White House....
Congratulations to Mexico and Canada!
The head of the OECD thinktank, Angel Gurría, has also welcomed the “new, modernized” trade deal between the US, Mexico and Canada.
Secretary-General Gurría says:
“The OECD has long supported open markets for trade and investment as a crucial driver of economic growth and jobs.
“Today’s announcement supports strong growth and good jobs in all three countries; it will boost the confidence of firms and investors by preserving stable and predictable rules-based trade in North America.
It will make the region more productive and more competitive internationally”.
Just in: Donald Trump has tweeted that the new trade agreement with Canada is a “wonderful” and “historic” breakthrough.Just in: Donald Trump has tweeted that the new trade agreement with Canada is a “wonderful” and “historic” breakthrough.
He argues that it will help US farmers and manufacturers sell goods overseas (a reference to Canada opening up its dairy sector to more competition).He argues that it will help US farmers and manufacturers sell goods overseas (a reference to Canada opening up its dairy sector to more competition).
He adds that USMCA will help the US, Canada and Mexico compete with the rest of the world -- a reminder that Washington is still pushing Beijing to reform its trade practices too.He adds that USMCA will help the US, Canada and Mexico compete with the rest of the world -- a reminder that Washington is still pushing Beijing to reform its trade practices too.
Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico. The new name will be The United States Mexico Canada Agreement, or USMCA. It is a great deal for all three countries, solves the many......Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico. The new name will be The United States Mexico Canada Agreement, or USMCA. It is a great deal for all three countries, solves the many......
.....deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduce Trade Barriers to the U.S. and will bring all three Great Nations closer together in competition with the rest of the world. The USMCA is a historic transaction!.....deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduce Trade Barriers to the U.S. and will bring all three Great Nations closer together in competition with the rest of the world. The USMCA is a historic transaction!
The US government has now released the details of the revamped trade deal, online here.The US government has now released the details of the revamped trade deal, online here.
It begins by boldly declaring that America, Canada and Mexico have agreed to “strengthen anew” their “longstanding friendship” -- not that relations have been particularly chummy since Donald Trump became president.It begins by boldly declaring that America, Canada and Mexico have agreed to “strengthen anew” their “longstanding friendship” -- not that relations have been particularly chummy since Donald Trump became president.
The agreement then confirms that the three parties have agreed to “REPLACE” (their capitals) the 1994 North American Free Trade Agreement with.....The agreement then confirms that the three parties have agreed to “REPLACE” (their capitals) the 1994 North American Free Trade Agreement with.....
“...a 21st Century, high standard new agreement to support mutually beneficial trade leading to freer, fairer markets, and to robust economic growth in the region”.“...a 21st Century, high standard new agreement to support mutually beneficial trade leading to freer, fairer markets, and to robust economic growth in the region”.
That will allow Trump to declare that he has delivered on his pledge to reshape Nafta (presumably he’ll be awake and tweeting shortly...).That will allow Trump to declare that he has delivered on his pledge to reshape Nafta (presumably he’ll be awake and tweeting shortly...).
But what of the new free trade deal itself?But what of the new free trade deal itself?
Wins for America include:Wins for America include:
US farmers get greater access to Canada’s dairy market, through an increased quota on foreign imports. This may be slightly more generous than the quotas available to Asian countries under the Agreement for Trans-Pacific Partnership (TPP) deal.US farmers get greater access to Canada’s dairy market, through an increased quota on foreign imports. This may be slightly more generous than the quotas available to Asian countries under the Agreement for Trans-Pacific Partnership (TPP) deal.
Canada has agreed to eliminate two classes of milk, which had encouraged Canadians to buy domestic milk rather than from overseas. That should help US producers who want to sell more milk across the border (which explains why the Canadian dairy lobby aren’t happy)Canada has agreed to eliminate two classes of milk, which had encouraged Canadians to buy domestic milk rather than from overseas. That should help US producers who want to sell more milk across the border (which explains why the Canadian dairy lobby aren’t happy)
Here's the key provision in USMCA that calls on Canada to end within 6 months of ratification its use of Milk Class 6 and 7. Big win for U.S. dairy. https://t.co/5R5k556jXW pic.twitter.com/qvruZf989bHere's the key provision in USMCA that calls on Canada to end within 6 months of ratification its use of Milk Class 6 and 7. Big win for U.S. dairy. https://t.co/5R5k556jXW pic.twitter.com/qvruZf989b
Canada, meanwhile, will be pleased that:Canada, meanwhile, will be pleased that:
The “Chapter 19 dispute-settlement mechanism”, created to resolve trade and anti-dumping disputes, remains untouched in the new agreement. Washington doesn’t like these dispute panels, and had pushed for Chapter 19 to be abolished.The “Chapter 19 dispute-settlement mechanism”, created to resolve trade and anti-dumping disputes, remains untouched in the new agreement. Washington doesn’t like these dispute panels, and had pushed for Chapter 19 to be abolished.
On cars, the deal means there is no hard limit on Canadian auto exports to America. Canada has also been promised an exemption if Trump imposes new tariffs on this area.On cars, the deal means there is no hard limit on Canadian auto exports to America. Canada has also been promised an exemption if Trump imposes new tariffs on this area.
Getting back to the US-Canada-Mexico trade deal....and Bloomberg’s Joe Nocera has written a interesting article explaining why America need to agree a new trade deal with Canada.Getting back to the US-Canada-Mexico trade deal....and Bloomberg’s Joe Nocera has written a interesting article explaining why America need to agree a new trade deal with Canada.
He points out that Canada is a massive trade partner for many US states, thanks to the elimination of tariffs under Nafta.He points out that Canada is a massive trade partner for many US states, thanks to the elimination of tariffs under Nafta.
For example, Virginia exports $3bn of goods to Canada -- around one-fifth of the state’s total exports -- while importing $2bn.For example, Virginia exports $3bn of goods to Canada -- around one-fifth of the state’s total exports -- while importing $2bn.
So, even though Donald Trump has savaged the Nafta deal in the past, Washington couldn’t afford let it die without a replacement.So, even though Donald Trump has savaged the Nafta deal in the past, Washington couldn’t afford let it die without a replacement.
Nocera explains:Nocera explains:
The media has been quick to label the deal with Canada – called the U.S.-Mexico-Canada Agreement, or USMCA – a “win” for Trump, but the truth is that for all his bluster, Nafta hasn’t been “renegotiated” so much as it’s been fiddled with on the margins.The media has been quick to label the deal with Canada – called the U.S.-Mexico-Canada Agreement, or USMCA – a “win” for Trump, but the truth is that for all his bluster, Nafta hasn’t been “renegotiated” so much as it’s been fiddled with on the margins.
The new Nafta – which Trump will no doubt praise – will be more or less the same as the old Nafta, which he has called “the worst trade deal in history.” Virginia will no doubt breathe a sigh of relief, as will businesses and labor unions and states across the country. They all understand that trade creates more jobs that it destroys, which is exactly what the Virginia example shows.The new Nafta – which Trump will no doubt praise – will be more or less the same as the old Nafta, which he has called “the worst trade deal in history.” Virginia will no doubt breathe a sigh of relief, as will businesses and labor unions and states across the country. They all understand that trade creates more jobs that it destroys, which is exactly what the Virginia example shows.
Lee McDarby, Corporate IP Managing Director at moneycorp, suspects the weak pount helped UK factories to grow faster last month:Lee McDarby, Corporate IP Managing Director at moneycorp, suspects the weak pount helped UK factories to grow faster last month:
“UK manufacturing shifted up a gear in September, with significant growth showing a clear pace of expansion.“UK manufacturing shifted up a gear in September, with significant growth showing a clear pace of expansion.
This increase is likely to be down to the Pound’s weakness and the Eurozone’s slowdown of manufacturing activity, with British manufacturers increasing outputs to take advantage of the opportunities to sell products overseas.This increase is likely to be down to the Pound’s weakness and the Eurozone’s slowdown of manufacturing activity, with British manufacturers increasing outputs to take advantage of the opportunities to sell products overseas.
Dave Atkinson, UK head of manufacturing at Lloyds Bank Commercial Banking, points out that economic uncertainty is still high:Dave Atkinson, UK head of manufacturing at Lloyds Bank Commercial Banking, points out that economic uncertainty is still high:
“An increase in the PMI figure this month is welcome news for a sector grappling with an ongoing lack of clarity about the UK’s future trading relationship with the EU, escalating trade wars and rising commodity prices.“An increase in the PMI figure this month is welcome news for a sector grappling with an ongoing lack of clarity about the UK’s future trading relationship with the EU, escalating trade wars and rising commodity prices.
“Manufacturers across different sub-sectors are starting to react to the ever-increasing likelihood of a no-deal Brexit with a degree of nervousness. Announcements from major automotive firms in response to ongoing economic uncertainty and suppressed demand are signs it is creating unease.“Manufacturers across different sub-sectors are starting to react to the ever-increasing likelihood of a no-deal Brexit with a degree of nervousness. Announcements from major automotive firms in response to ongoing economic uncertainty and suppressed demand are signs it is creating unease.
Capital Economics remain cautious:Capital Economics remain cautious:
Although September’s rise in the Manufacturing PMI is a welcome surprise, it is far from clear that the sector’s troubles are over. Indeed, the ratio of new orders to finished stocks points to growth in manufacturing output slowing further in the coming months. pic.twitter.com/mbg3Q6luitAlthough September’s rise in the Manufacturing PMI is a welcome surprise, it is far from clear that the sector’s troubles are over. Indeed, the ratio of new orders to finished stocks points to growth in manufacturing output slowing further in the coming months. pic.twitter.com/mbg3Q6luit
Newsflash: Britain’s factories have shaken off worries over trade wars and Brexit.Newsflash: Britain’s factories have shaken off worries over trade wars and Brexit.
Activity in the UK manufacturing sector picked up in September, according to the latest data from Markit.Activity in the UK manufacturing sector picked up in September, according to the latest data from Markit.
Output and new orders grew at a fast rate, while new export business returned to (modest) growth after a worrying decline in August.Output and new orders grew at a fast rate, while new export business returned to (modest) growth after a worrying decline in August.
This pushed Markit’s UK manufacturing PMI up to 53.8 in September, better than expected (and faster than the eurozone too!). August’s report has been revised up too, to 53.0.This pushed Markit’s UK manufacturing PMI up to 53.8 in September, better than expected (and faster than the eurozone too!). August’s report has been revised up too, to 53.0.
UK #Manufacturing #PMI rises to 53.8 in September, buoyed mainly by solid domestic demand. Future optimism picked up. Export orders stabilise after steep fall in August. https://t.co/stJc7YGjS6 pic.twitter.com/V3AQpicPYZUK #Manufacturing #PMI rises to 53.8 in September, buoyed mainly by solid domestic demand. Future optimism picked up. Export orders stabilise after steep fall in August. https://t.co/stJc7YGjS6 pic.twitter.com/V3AQpicPYZ
Rob Dobson, Director at IHS Markit, says we shouldn’t get carried away -- growth is still unspectacular, and firms did cut their headcount last month.Rob Dobson, Director at IHS Markit, says we shouldn’t get carried away -- growth is still unspectacular, and firms did cut their headcount last month.
Dobson adds:Dobson adds:
“September saw a mild improvement in the performance of the UK manufacturing sector. Domestic market demand strengthened, while increased orders from North America and Europe helped new export business stage a modest recovery from August’s contraction. Business confidence also rose to a three- month high.“September saw a mild improvement in the performance of the UK manufacturing sector. Domestic market demand strengthened, while increased orders from North America and Europe helped new export business stage a modest recovery from August’s contraction. Business confidence also rose to a three- month high.
“Despite these causes for short-term optimism, conditions in manufacturing are still relatively lacklustre overall. Based on its historical relationship with official ONS data, the latest survey is consistent with output expanding at only a moderate pace. Although total exports rose, exports of goods used as inputs by other manufacturers fell for the third straight month, ending the worst quarter for over three years for such exporters, suggesting that foreign companies may be sourcing less from UK-based component suppliers.“Despite these causes for short-term optimism, conditions in manufacturing are still relatively lacklustre overall. Based on its historical relationship with official ONS data, the latest survey is consistent with output expanding at only a moderate pace. Although total exports rose, exports of goods used as inputs by other manufacturers fell for the third straight month, ending the worst quarter for over three years for such exporters, suggesting that foreign companies may be sourcing less from UK-based component suppliers.
Eurozone factories aren’t the only ones to find September tough.Eurozone factories aren’t the only ones to find September tough.
Over in China, manufacturing growth ground to a halt last month, according to the latest healthcheck from Markit.Over in China, manufacturing growth ground to a halt last month, according to the latest healthcheck from Markit.
Chinese factory bosses reported that new export business had fallen at the quickest rate since early 2016, spurring them on to cut staffing levels.Chinese factory bosses reported that new export business had fallen at the quickest rate since early 2016, spurring them on to cut staffing levels.
This pulled the Chinese manufacturing PMI down to 50.0, a level that shows stagnation.This pulled the Chinese manufacturing PMI down to 50.0, a level that shows stagnation.
This will fuel concerns that Donald Trump’s trade war with China is causing economic harm.This will fuel concerns that Donald Trump’s trade war with China is causing economic harm.
Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group, says Chinese factories are suffering from weaker demand, adding gloomily that....Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group, says Chinese factories are suffering from weaker demand, adding gloomily that....
Expansion across the manufacturing sector weakened in September, as exports increasingly dragged down performance and continued softening demand began to have an impact on companies’ production. In addition, the employment situation worsened further.Expansion across the manufacturing sector weakened in September, as exports increasingly dragged down performance and continued softening demand began to have an impact on companies’ production. In addition, the employment situation worsened further.
Downward pressure on China’s economy was significant.”Downward pressure on China’s economy was significant.”
#China manufacturers signal stagnant operating conditions at end of Q3, following improvements in the prior 15 months. Moreover, exportorders declined at the quickest rate since Feb 2016 amid rising trade frictions. #PMI: https://t.co/YZ6mb9vDXJ pic.twitter.com/5puSokfSgU#China manufacturers signal stagnant operating conditions at end of Q3, following improvements in the prior 15 months. Moreover, exportorders declined at the quickest rate since Feb 2016 amid rising trade frictions. #PMI: https://t.co/YZ6mb9vDXJ pic.twitter.com/5puSokfSgU
Newsflash: Growth across the eurozone’s factory sector has dropped to its lowest level in two years.Newsflash: Growth across the eurozone’s factory sector has dropped to its lowest level in two years.
Data firm IHS Markit says its eurozone manufacturing PMI, which measures activity across the industry, fell to 53.2 in September, down from 54.6 in August.Data firm IHS Markit says its eurozone manufacturing PMI, which measures activity across the industry, fell to 53.2 in September, down from 54.6 in August.
That pulls it closer to the 50-point mark showing stagnation.That pulls it closer to the 50-point mark showing stagnation.
Firms reported that export growth was modest last month, with several major EU nations faring particularly badly.Firms reported that export growth was modest last month, with several major EU nations faring particularly badly.
Markis blames the “weakening trade cycle” for denting demand for European goods, adding:Markis blames the “weakening trade cycle” for denting demand for European goods, adding:
Eurozone new export orders were little-changed during September, rising only slightly and at the weakest rate in the current 63-month sequence of growth.Eurozone new export orders were little-changed during September, rising only slightly and at the weakest rate in the current 63-month sequence of growth.
Whilst the Netherlands, Ireland and Greece all continued to record notable increases in exports, outright falls were seen in France and Germany.Whilst the Netherlands, Ireland and Greece all continued to record notable increases in exports, outright falls were seen in France and Germany.
Chris Williamson, chief business economist at IHS Markit, adds that eurozone manufacturing ‘shifted down yet another gear’ in recent months:Chris Williamson, chief business economist at IHS Markit, adds that eurozone manufacturing ‘shifted down yet another gear’ in recent months:
“The survey paints the worst trade picture for over five years, with export growth having slumped sharply from a series record high in late 2017 to near-stagnation in September.“The survey paints the worst trade picture for over five years, with export growth having slumped sharply from a series record high in late 2017 to near-stagnation in September.
“The slowdown can be linked to sluggish demand and increased risk aversion among customers, often linked to worries about trade wars and tariffs, but also ascribed to rising political uncertainty and higher prices.“The slowdown can be linked to sluggish demand and increased risk aversion among customers, often linked to worries about trade wars and tariffs, but also ascribed to rising political uncertainty and higher prices.
Canada’s farmers don’t believe Justin Trudeau’s claim that the USMCA deal is “good for Canada”.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.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: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.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.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.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).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).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#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: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.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: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,”“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.”“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/0euzA3sCL1The 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/NmRNn4KvKiBREAKING 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 todayAlso 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 September9am BST: Eurozone manufacturing PMI for September
9.30am BST: UK manufacturing PMI for September9.30am BST: UK manufacturing PMI for September
10am BST: Eurozone unemployment figures for August10am BST: Eurozone unemployment figures for August
3pm BST: US manufacturing PMI for September3pm BST: US manufacturing PMI for September