WASHINGTON • President Donald Trump yesterday declared a new US trade pact with Canada and Mexico to be "a great deal" for all three countries, hailing the replacement of the old Nafta deal which he long railed against and threatened to cancel.
The new deal, which is known as the United States-Mexico-Canada Agreement (USMCA), was agreed close to the deadline late on Sunday night after more than a year of tough negotiations to revamp a 24-year-old continental trade pact Mr Trump had labelled a disaster.
"Late last night, our deadline, we reached a wonderful new trade deal with Canada, to be added into the deal already reached with Mexico," Mr Trump said on Twitter. "It is a great deal for all three countries," added the US President.
Mr Trump, who had made revamping the North American Free Trade Agreement (Nafta) a signature policy initiative, said the new pact "solves the many deficiencies and mistakes" in the previous agreement .
USMCA "greatly opens markets to our farmers and manufacturers" while reducing trade barriers, "and will bring all three great nations closer together in competition with the rest of the world. The USMCA is a historic transaction", he said.
The rewritten deal "will result in freer markets, fairer trade and robust economic growth in our region", a joint statement from US Trade Representative Robert Lighthizer and Canada's Foreign Affairs Minister Chrystia Freeland said late on Sunday after six weeks of intense talks.
In the end, Canada and the US overcame their differences after both sides conceded some ground to reach a deal covering a region of 500 million inhabitants and which conducts about US$1 trillion (S$1.37 trillion) in trade a year.
"It is a good day for Canada," Canadian Prime Minister Justin Trudeau said on Sunday night.
Mexican President Enrique Pena Nieto said the agreement is a win for all three countries.
The political stakes were high. Mr Trump, who pursues an "America First" policy on trade, needs to look strong heading into next month's mid-term elections, where his Republican Party is fighting to keep control of Congress.
Mr Trudeau, for his part, did not want to be seen as caving in before next year's general election in Canada. But, on the other hand, it risked being frozen out of a US-Mexico deal reached in August.
The pact can now be signed before Mr Pena Nieto leaves office on Dec 1, the date that caused the last-minute flurry of activity.
Canada had opposed US demands to weaken or eliminate Nafta's dispute resolution mechanism, whose arbitration panels Ottawa used to resolve trade conflicts, particularly concerning its important lumber industry.
In order to reach the deal, Canada agreed to open its dairy market further to US producers, and - in return - Washington left unchanged the dispute settlement provisions.
Under Canada's supply-managed dairy system, Ottawa effectively sets production quotas, which raises prices to consumers but provides farmers with a stable income.
The deal will also make it harder for global automakers to build cars cheaply in Mexico.
The trade pact will remain in force for 16 years, but will be reviewed every six years.