Donald Trump and the leaders of Canada and Mexico signed a revised North American trade pact, a deal that fulfills a key political pledge by the US president but faces an uncertain future in the US Congress.
The celebratory moment was dimmed by ongoing differences over Trump’s steel and aluminum tariffs, as well as plans for massive layoffs in the US and Canada by General Motors.
The US-Mexico-Canada Agreement (USMCA) is meant to replace the 24-year-old North American Free Trade Agreement (Nafta), which Trump has long denigrated as a “disaster”.
But while Trump has hailed the new agreement as a radical rewrite of the “worst trade deal ever made”, Canadian prime minister Justin Trudeau pointedly referred to the deal as the “new North American Free Trade Agreement”.
Trump appeared with Trudeau and outgoing Mexican president Enrique Peña Nieto at the G20 summit in Buenos Aires for the formal signing ceremony. Each country’s legislature must also approve the agreement.
“It’s been long and hard. We’ve taken a lot of barbs and a little abuse and we got there,” Trump said of the pact. “It’s great for all our countries.”
Legislative approval is the next step in the process, but could prove to be a difficult task in the US, especially now that Democrats – instead of Trump’s Republicans – will control the House of Representatives come January. Democrats and their allies in the labor movement are already demanding changes to the agreement.
Within hours of the signing, Senate Democratic leader Chuck Schumer said the deal must have stronger labor and environmental protections in order to get majority support in Congress and “must prove to be a net benefit to middle-class families and working people”.
The three countries agreed to the USMCA just hours before a US-imposed 30 September deadline. Many trade analysts say the successor to Nafta isn’t all that different from the old one, despite Trump’s claim that it would “transform North America back into a manufacturing powerhouse”.
While Trump hailed the revised trade pact, Trudeau was more measured and used the event to call on Trump to remove steel and aluminum tariffs the US slapped on Canada and Mexico. Trudeau also referenced recent downsizing moves by GM in North America as a “heavy blow”.
“With hard work, good will and determination, I’m confident that we will get there,” Trudeau said.
Peña Nieto, who will hand off to his successor Saturday, said he was honored to be at the signing on the final day of his administration, calling it the culmination of a long process “that allow us to overcome differences and to conciliate our visions”.
The new agreement requires that 40% of cars eventually be made in countries that pay autoworkers at least $16 an hour – that is, the US and Canada and not Mexico – to qualify for duty-free treatment under the trade pact. It also requires Mexico to pursue reforms of labor law to encourage independent unions.
