Trump signs US Mexico Canada Agreement

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US President Donald Trump has formally signed a new trade pact with Mexico and Canada, bringing his campaign promise to replace the three countries’ existing deal closer to fruition.

The US Mexico Canada Agreement (USMCA) is set to replace the 1994 North American Free Trade Agreement (Nafta).

Mr Trump has described Nafta as America’s “worst” deal and blamed it for a decline in manufacturing jobs.

Canada has yet to ratify the pact but is expected to do so.

The three countries announced they had reached a deal in 2018 after more than a year of negotiation. The accord has been working its way through the legislatures of the three countries ever since.

In the US, Democrats, who control the House of Representatives, insisted on changes – including stronger labour rules – before voting in support of the measure. Those revisions were approved late last year.

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Many of the original Nafta provisions will continue under the new accord, which governs more than $1tr in annual trade between the three countries. It also sets new terms for digital trade and increases US access to Canada’s dairy market.

The most eye-catching changes concern new rules for car companies, which are aimed at boosting production in the US.

The new deal requires a higher percentage of vehicles to be made in North America to qualify for tariff-free treatment. It also requires that a certain percentage of each vehicle be made by workers making at least $16 an hour.

The US will provide more than $27m in grants to Mexico to help enforce labour laws and address issues such as child workers in the agricultural sector, the Department of Labour announced.

At a White House signing ceremony on Wednesday, to which Democrats were not invited, Mr Trump said the new deal was a “massive win” that would end the Nafta “nightmare”.

He also thanked Republican senators for their role – joking that his compliments may be tied to his interest in their support at his ongoing impeachment trial.

“Maybe I’m just being nice because I want their vote,” he said.

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