Markets rally as Trump hails biggest ever trade deal with Canada and Mexico – as it happened

Markets rally as Trump hails \biggest ever\ trade deal with Canada and Mexico - as it happened

US and Canada reach new trade deal to replace Nafta

President Donald Trump speaking with the Mexican president as Trump made an announcement on NAFTA in the Oval Office. Kevin Lamarque/Reuters

The Mexican peso and the Canadian dollar were surging Monday morning after the US and Canada struck an agreement that strengthens the trading relationship of the three North American economic powerhouses.

The U.S. chemical sector has capitalized on duty-free trade under NAFTA ever since its inception, more than tripling U.S. chemicals exports to Canada and Mexico – from $13 billion in 1994, to $44 billion in 2018. Approximately 46,000 U.S. chemical jobs now depend on trade with Canada and Mexico. And due to the chemical industrys early position in the supply chain, U.S. chemical manufacturers have exploited the cost savings from duty-free trade with Mexico and Canada in order to power growth throughout the supply chain and lower prices for manufacturers and consumers.

Video: U.S., Mexico, Canada reach trade deal to replace NAFTA

Trade negotiators for the US and Canada on Sunday evening put the finishing touches on a deal to reshape the 25-year-old North American Free Trade Agreement, known as NAFTA. It is the largest trade-deal rewrite of President Donald Trumps tenure.

The dollar weakened against the Canadian dollar which was boosted by Canadas freshly minted trade deal with the US. The deal with the slightly less elegant name of United States-Mexico-Canada Agreement, or USMCA, will replace the existing NAFTA and will give the US access to the Canadian dairy market while capping Canadas car exports to its southern neighbour. Taken as a sign that the US will be open to finding resolutions to its other ongoing trade disputes the deal prompted rallies across the US markets and caused the DJIA to climb 250 points.

The agreement came just hours before a deadline set by the Trump administration and will now need congressional approval. It follows more than a year of negotiations between the US, Canada, and Mexico over the trilateral agreement.

Minutes after telling a female reporter youre not thinking, you never do Trump bemoans how the press treats himTRUMP: “I think the press has treated me unbelievably unfairly. … They got worse! Theyre worse now than ever! Theyre loco! But thats okay. I put up with it.” pic.twitter.com/1IkN3hHod8

Trumps agreement with Canada concludes a lengthy negotiation period and adds to the agreement struck in August by the US and Mexico, ensuring continued strong ties among the three nations.

The timeline of the notification period has provided urgency to spearhead a NAFTA deal through Congress and onto the desk of Mexican President Enrique Peña Nieto before President-Elect Andrés Manuel López Obrador takes office in December. While López Obrador did have representatives present during the US-Mexico talks, US and Mexican officials worried about about possible political upheaval around the changeover.

US, Canada NAFTA trade deal, seals trilateral pact with Mexico

The president greeted the agreement as “wonderful” on Monday morning, calling it “a great deal for all three countries.”

The statement went on: “USMCA 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.”

Canada and the U.S. Have Reached a Deal on NAFTA: Official

“Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico,” Trump said on Twitter, adding that NAFTA would be renamed the United States-Mexico-Canada Agreement.

Canada, meanwhile, wanted to maintain Chapter 19, a key element of NAFTA that allowed countries to bring a grievance against another NAFTA member regarding unfair trade practices or tariffs. The procedure was essentially a fast-track version of the World Trade Organizations dispute settlements but only applied to the three NAFTA members.

“It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world,” he said. “The USMCA is a historic transaction!”

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As the smallest of the three economies, Mexico sees outsize benefits from its trading partnership with the US and Canada.

The peso has rocketed, gaining about 0.7% in trade against the dollar on Monday morning. By just after 10 a.m. BST, or 5 a.m. ET, the currency was trading at 18.54 to the dollar, as the chart below illustrates (this pairing shows the dollars fall against the peso, rather than the pesos gains):

“Investors have been waiting patiently for some good news regarding trade since the US escalated trade tensions earlier this year,” Jasper Lawler, the head of research at London Capital Group, said in an email. “There is clear elation that a deal has been struck.”

Video: Trudeau calls USMCA deal a “good day for Canada”

Canadian dollar up on NAFTA agreement, Nikkei hits 27-year high

The Canadian dollar has followed a similar pattern to the peso, gaining against the US dollar in overnight and European morning trading, though gains have been a little smaller:

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Video: Canada US NAFTA deal

World at web:


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