US, Canada sign last-minute trade deal to replace NAFTA

Canada and the US on Monday reached a last-minute deal to replace the North American Free Trade Agreement (NAFTA), which also includes Mexico.

Few details were available after a deal was reached overnight ahead of a deadline imposed by US President Donald Trump. It is understood that Canada agreed to give the US more access to its dairy market in return for a limited guarantee on car export tariffs into America.

"Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement (USMCA)," US Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said in a joint statement.

They said the USMCA would "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. We look forward to further deepening our close economic ties when this new agreement enters into force.”

Mexico had already agreed terms with the US, but strained relations between Trump and his Canadian counterpart Justin Trudeau had stalled talks.

Trump, who called NAFTA “the worst deal maybe ever signed", was under pressure to deliver a new agreement ahead of crucial Congressional mid-term elections in November and before Mexican President Enrique Peña Nieto leaves office on December 1. To meet that deadline, the text of the agreement had to be submitted to Congress before October.