- 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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