It was an election promise from Donald Trump, the new free trade agreement linking the United States, Canada and Mexico came into force on Wednesday when the borders between the three countries are partially closed due to a pandemic of COVID-19.
Non-essential movements between the three countries are indeed prohibited until July 21 to stem the new coronavirus. The flow of goods nevertheless continues to circulate.
Not only does the CUSMA (Canada, United States, Mexico agreement) take effect in a particular context, but it is far from eliminating all the friction between the three partners whose economies have become interdependent over time.
“It looks more like a temporary truce with the Trump administration than a return to stability in North American trade,” said Edward Alden, an international trade expert at the Council on Foreign Relations.
And trade tensions can resume at any time with an American president who has campaigned for re-election in November.
On June 17, before the entry into force of the treaty, the American representative for trade (USTR), Robert Lighthizer, who himself negotiated the CUSMA, had also warned before Congress that the Trump administration was prepared to take action as “often” as necessary to challenge possible violations of the new agreement.
His teams will closely monitor the issue of the dairy trade, a long-standing dispute between American and Canadian farmers.
For Mexico, Mr. Lighthizer had noted the existing disputes, mentioning Mexico City’s refusal to approve new imports of US GM products in the past two years.
The CUSMA, obtained after a diplomatic showdown, ratified at the end of 2019, replaces NAFTA (North American free trade agreement) which dates from 1994 and which was unanimously considered obsolete.
“Today marks the start of a new and much better chapter in trade between the United States, Mexico and Canada,” USTR said in a statement on Wednesday.
The Republican president, who had called NAFTA the “worst trade deal” in US history, had ordered its renegotiation a few months after arriving at the White House.
Accusing him of having destroyed thousands of jobs in the automotive sector due to the relocation of production to Mexico where the labor is cheaper, he finally obtained major changes to the “rules of origin ”allowing American industrialists to take a larger share in this industry.
“This is a monumental change,” Robert Lighthizer responded on Wednesday, noting “modernized approaches that will create more jobs, better worker protection, greater access to markets and greater trade opportunities for large and small.” businesses ”.
The final version of the treaty had been ratified in late 2019 after numerous amendments spurred on by American Democrats.
For the time being, the three countries can welcome the principle of a large area for free trade in goods without customs duty.
Bringing together some 500 million inhabitants, this treaty is crucial for the three economies that are now interdependent.
In 2019, trade between the three indeed amounted to some $ 1.2 trillion.
And the gross domestic product of their combined economies represents some 27% of world GDP.
“With the new NAFTA, we have been able to protect our cultural industries in the digital age and for the future, we have been able to provide better protection for our automotive industry,” Canadian Prime Minister Justin Trudeau said on Monday. his daily press briefing.
He also welcomed the fact that his government had “successfully protected the privileged access that thousands and thousands of Canadian businesses and millions of Canadians have to the American market at a time of protectionism and uncertainty in the economy.” World trade”.
But he also raised rumors that Donald Trump could reimpose tariffs on Canadian aluminum.
“Indeed, we hear the worrying proposals in relation to potential tariffs on aluminum,” he said.
But he argued that the United States did not have sufficient production capacity and needed Canadian aluminum for its automotive and high-tech industries.
In June 2018, in the midst of the renegotiation of NAFTA, Donald Trump did not hesitate to impose punitive tariffs on Canadian aluminum, causing the amazement of his historic ally.
Sign of potential tensions, Robert Lighthizer estimated Wednesday that “now, more than ever, the United States must stop the sub-contracting of jobs and increase their production capacity and their investments here at home”.
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