United States has reached an agreement with Canada and Mexico to lift tariffs on steel and aluminium and the corresponding retaliatory tariffs.
Elimination of these tariffs is expected to remove a significant barrier to passing the U.S.-Mexico-Canada Agreement (USMCA).USMCA has replaced North American Free Trade Agreement (NAFTA).
NAFTA was an agreement signed by Canada, Mexico, and the United States, creating a trilateral trade bloc in North America.
According to US President, NAFTA was the worst trade deal ever made by United States.Thus,he initiated negotiations to replace it.
In 2018,Canada,U.S and Mexico had signed on a new free trade pact named USMCA.Each country must follow its domestic procedures before the agreement can be ratified and thus take effect.
USMCA is intended to last 16 years and will be reviewed every 6 years.USMCA gives the U.S. greater access to the dairy markets of Canada.Tariffs of up to 275% have kept most foreign milk out of the Canadian market.
Canada has also managed to preserve the dispute-settlement mechanism as a protection for its wood industry.It also includes stronger protections for workers, tough environmental rules, updates the trade relationship to cover the digital economy and provides tougher intellectual property protections.
It also adds provisions to prevent manipulation of the trade rules, including covering currency values and controls over outside countries trying to take advantage of the duty-free market.
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