US and Canada sign trade deal replacing NAFTA

Canada on September 30, 2018, agreed to sign a trade deal with the United States and Mexico, revamping the North American Free Trade Agreement after almost a year of negotiations. The new deal has been named the United States-Mexico-Canada Agreement (USMCA).

The trilateral pact is expected to be signed by the three North American countries before the end of November, after which it would be submitted to Congress. The deal was agreed upon by Canada just hours before the US imposed September 30 midnight deadline.

Key Highlights:-
1. The new trade deal would make significant changes to the rulebook that has governed North America, trade since 1994.
2. It will for the first time set rules for financial-services and digital businesses that have emerged since the bloc was created.
3. It would allow US farmers greater access to Canada’s dairy market and address concerns about potential US auto tariffs. The pact will come up for review every six years.
4. Under the agreement, Canada has agreed to export a quota of 2.6 million vehicles to the United States in the wake of 25 percent global autos tariffs imposed by the US on national security grounds.
5. The quota would allow for a significant growth in tariff-free automotive exports from Canada above current production levels of about 2 million units, safeguarding Canadian plants.
6. The deal, however, failed to resolve U.S. tariffs on Canada’s steel and aluminum exports.

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