Economy

Japanese Nikkei hits 27-year high as markets cheer Nafta deal

Japanese Nikkei hits 27-year high as markets cheer Nafta deal”

Tariffs on imported steel have hit the construction industry nationwide but the newly-minted trade deal between the USA and Canada may not provide the needed relief, at least not immediately.

On the face of it, Trump's trade deals should boost factory jobs in the US.

"It's a good day for Canada", Canadian Prime Minister Justin Trudeau said.

The new trade deal that the United States, Canada, and Mexico have agreed to prevents Canada and Mexico from creating a free trade agreement with China without USA approval, Reuters reported.

Indeed, Canadian influence in Congress may have helped discourage U.S. Trade Representative Robert Lighthizer from trying to push senators into approving the bilateral deal he forged with Mexico, said Dan Uczjo, an worldwide trade lawyer in OH with the U.S. firm Dickinson Wright.

The president argued the USMCA focuses on fairness and reciprocity.

The new agreement made big changes for auto manufacturers in hopes of ensuring more of those products are made in North America. It limited imports of those dairy products from the US and drew criticism from President Donald Trump, who claimed it was "unfair".

Washington has more than 450 dairy farms, with about 2,200 jobs created by of dairy exports.

Those rules require that a certain percentage of an imported vehicle's components be manufactured in the United States.

Balsillie said that these changes will hurt Canadian business, as the country is a net importer of intellectual property - in effect, they will allow US businesses to "entrench and extend" their business here.

Processors who may use cheaper milk ingredients from the USA are unlikely to cut prices on final products, Thériault said, while milk sold in stores is still subject to a provincially-established floor price. "So if you comply with the rules of origin, there's no way you are subject to 232 tariffs", Ujczo said. "The practical consequences are limited, if any".

The inclusion of the clause surprised many trade experts, some of whom said it would impede Canada's trade aspirations with China.

"The effect of it was, you got this uncertainty in the market between buyers and sellers where they don't know what the price of the product is going to be", he said.

The most significant revisions mirror the provisions the Obama administration negotiated during the TPP talks a couple of years ago.

USMCA also said that Mexico needed to make it easier for workers to form unions. Canada will open its markets to more United States milk and dairy products, under the USMCA, while the U.S. offered some opening of highly protected agriculture markets, such as for sugar.

The deal also gives modernized protections to things like patents and intellectual properties.

"It's a great win for the president and a validation of his strategy in the area of worldwide trade".

"Today we are securing a higher standard of living far into the future for the people of Canada", Trudeau said during a news conference Monday in Ottawa.

Meantime, congratulations were being offered among key stakeholders who have been on the edge of their seats waiting to see if Canada and the United States would find common ground. Washington has already reached a bilateral deal with Mexico, the third NAFTA member.

Under the new accord, Canada pledged to curb some of the ways it protects its dairy industry. "The agreement is an important step in our trade policy and I will continue to review the details of the agreement and reach out to the business community of Alabama to get a full picture of the USMCA's potential impacts".

Canadian Foreign Minister Chrystia Freeland, in Ottawa for the negotiations, scrapped plans to give her country's annual address to the U.N. General Assembly on Monday, a spokesman said.

"Canada and Mexico are our first and second largest trading partners so It's absolutely critical that we have access to those markets and it looks like this will provide us just that".



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