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By: Lanaya Elsweeta Bowen

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Welcome to my padlet on Free Trade Agreements on this page you will learn about what free trade agreements especially highlighting the recent deal with the United States, Canada and Mexico.

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What is a Free Trade Agreement (FTA)- Image 1

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What is a Free Trade Agreement (FTA)- Image 1

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Free Trade Agreement regulate tariffs and other trade restrictions between two or more countries which means it makes it easier for local business and industries

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Recently an FTA was made between Mexico, Canada and United States of America and new name is CUSMA (Canada, United States, Mexico Agreement) and it was formerly called the North America Free Trade agreement.

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So even until this day the three leaders have been having disagreements over the name of the deal. Because Canada wants to name the deal Canada, United States, Mexico Agreement. Whereas, Donald Trump wants to put U.S. first and Canada last. But according to Canadian policies Canada must be named first. So Justin Trudeau has been referring to it as the new NAFTA agreement. I have learned that even the name of the deal is so political.

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US Canada Mexico sign trade agreement...

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Pro vs Cons of Nafta- Video 2 (https://www.youtube.com/watch?v=DwKR08t5BGA)

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Pro vs Cons of Nafta- Video 2 (https://www.youtube.com/watch?v=DwKR08t5BGA)

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So some people are on the fence about whether NAFTA was a good deal or not and my opinion is that t was a good deal. I thing it was a good deal because it created many jobs. In regards, to Mexico I believe it helped their economy a lot because of avocados, in america it is harder to grow the vegetable in the states and in recent years there has been more of a demand for them. In regards to Canada I believe that the helped Canada dairy farmer because of our complex system we have in place. I overall thing that this deal is good for Canada and it has helped me learn how important our dairy system is.

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With the recent signing of the new deal Americans are unhappy with how we quote and taxes items. But the system Canada has in place protect our farmer and pays them more although it does make it more expensive for us to purchase milk. But overall I do think that it is a fair deal because it stops the farmers from going bankrupt. But from the American perceptive I can understand why they think it is unfair for us to charge them so much

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Dairy trade sours NAFTA negotiations with Canada

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For the most part this deal has helped Canadians especially since this deal has mad 1.2 trillion dollars between the three countries. But there has been some new changes with the recently signed agreement. Firstly our country is now making it easier for the U.S by not charge really high tariff on U.S. dairy products. Also another major problem was the steel trade which is currently remaining the same which is unfair because the U.S. tariff rates are high.

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On Sunday night, President Trump got his wish for a significantly revised North American trade deal. After more than a year of intense negotiations, the United States, Canada and Mexico r eached an agreement to update the North American Free Trade Agreement, the 1994 pact that governs more than $1.2 trillion worth of trade among the three nations.

The new deal won't go into effect right away. Most of the key provisions don't start until 2020 because leaders from the three countries have to sign it and then Congress and the legislatures in Canada and Mexico have to approve it, a process that is expected to take months.

Here's a rundown of what's in the "new NAFTA."

New name. Goodbye NAFTA. The new deal will be known as the United States-Mexico-Canada Agreement, or USMCA. Trump, who had long disdained NAFTA, had suggested that he might call it the "USMC," in honor of the U.S. Marine Corps, but in the end, USMCA won out.

Big changes for cars. The goal of the new deal is to have more cars and truck parts made in North America. Starting in 2020, to qualify for zero tariffs, a car or truck must have 75 percent of its components manufactured in Canada, Mexico or the United States, a substantial boost from the current 62.5 percent requirement.
[Winners and losers of Trump's new trade deal with Canada and Mexico]
There's also a new rule that a significant percentage of the work done on the car must be completed by workers earning at least $16 an hour, or about three times what the typical Mexican autoworker makes. Starting in 2020, cars and trucks should have at least 30 percent of the work on the vehicle done by workers earning $16 an hour. That gradually moves up to 40 percent for cars by 2023.

While many economists think these new rules will help some North American workers, they also warn that car prices might rise and some small cars may no longer be made in North America because they would be too expensive under the new requirements. There are also concerns that automakers might not make as many cars in North America to export to China and elsewhere overseas because costs would be higher in the USMCA region than making the vehicles in Asia.

Trump's victory: Canada opens up its milk market to U.S. farmers. Trump tweeted often about how unfair he thought it was that Canada charged such high tariffs on U.S. dairy products. Canada has a complex milk and dairy system. To ensure Canadian dairy farmers don't go bankrupt, the Canadian government restricts how much dairy can be produced in the country and how much foreign dairy can enter to keep milk prices high. Trump didn't like that, and dairy was a major sticking point in the negotiations.

In the end, Canada is keeping most of its complex system in place, but it is giving greater market share to U.S. dairy farmers. U.S. negotiators say they got a major victory by forcing Canada to eliminate the pricing scheme for what are known as Class 7 dairy products. That means U.S. dairy farmers can probably send a lot more milk protein concentrate, skim milk powder and infant formula to Canada (and those products are relatively easy to transport and store).

Canada's victory: Chapter 19, allowing for a special dispute process, stays intact. Canadian Prime Minister Justin Trudeau said repeatedly that he wanted to keep Chapter 19 in place, and that's exactly what happened. The U.S. side pushed hard to eliminate this chapter, but in the end, it stayed.

Chapter 19 allows Canada, Mexico and the United States to challenge one another's anti-dumping and countervailing duties in front of a panel of representatives from each country. This is generally a much easier process than trying to challenge a trade practice in a U.S. court. Over the years, Canada has successfully used Chapter 19 to challenge the United States on its softwood lumber restrictions.

Mexico and Canada get assurance Trump won't pound them with auto tariffs. Trump has repeatedly threatened to slap hefty tariffs on car and vehicle parts coming from overseas into the United States. Along with the new trade deal, his administration signed "side letters" allowing the two nations to mostly dodge Trump's auto tariffs.

The side letters say Canada and Mexico can continue sending about the same vehicles and parts across the border free of charge, regardless of whether auto tariffs go into effect down the road. Only parts above that quota could face tariffs.

Trump's steel tariffs stay in place (for now). Canada wanted Trump to stop his 25 percent tariffs on Canadian steel. That didn't happen - yet. The two countries are still discussing lifting those tariffs, but a senior White House official said Sunday that process is on a "completely separate track." Trudeau has called the steel tariffs "insulting and unacceptable" because the two nations are such close allies.

Improved labor and environmental rights. The USMCA makes a number of significant upgrades to environmental and labor regulations, especially regarding Mexico. For example, the USMCA stipulates that Mexican trucks that cross the border into the United States must meet higher safety regulations and that Mexican workers must have more ability to organize and form unions. Some of these provisions might be difficult to enforce, but the Trump administration says it is committed to ensuring these happen - a reason U.S. labor unions and some Democrats are cheering the new rules.

Increased intellectual property protections. The new IP chapter is 63 pages and contains more-stringent protections for patents and trademarks, including for biotech, financial services and even domain names. Many business leaders and legal experts believed these updates were necessary given that the original agreement was negotiated 25 years ago.

Big drug companies gain more footing in Canada. U.S. drug companies will now be able to sell pharmaceuticals in Canada for 10 years before facing generic competition. That's up from eight years of so-called "market protection" now.

Deal must be reviewed after 6 years. The USMCA stipulates that the three nations will review the agreement after six years. If all parties agree it's still good, then the deal will continue for the full 16 year period (with the ability to renew after that for another 16 years). This was a compromise provision: Trump wanted ability to renegotiate the deal frequently. Ultimately, there will be a review, but it won't happen until after Trump leaves office.

Chapter 11, giving investors a special way to fight government decisions, is (mostly) gone. Chapter 11 is eliminated entirely for Canada and mostly for Mexico, except for some key industries such as energy and telecommunications. Chapter 11 gave companies and investors a special process to resolve disputes with one of the governments in NAFTA. The idea was that if investors put a lot of money into a project and then the government changed the rules, there was a clear dispute process - outside the court system - where investors could get their problem resolved.

Critics argue that Chapter 11 was mainly used as a way for big corporations to get taxpayer money, but businesses say it was necessary to ensure they weren't harmed by sudden changes when new governments came into power in Mexico, Canada or the United States. In the end, Chapter 11 is mostly gone, except for a few key industries, such as oil, that lobbied hard to be able to challenge the Mexican government if it changes the rules and tries to nationalize its energy sector again.
Related: Under Trump, the jobs boom has finally reached blue-collar workers. Will it last? Canada agrees to join trade accord with U.S. and Mexico, sending new NAFTA deal to Congress U.S. and China clobber each other with biggest sets of tariffs yet

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Analysis | U.S., Canada and Mexico just reached a sweeping new NAFTA deal. Here's what's in it.

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On Sunday night, President Trump got his wish for a significantly revised North American trade deal. After more than a year of intense negotiations, the United States, Canada and Mexico r eached an agreement to update the North American Free Trade Agreement, the 1994 pact that governs more than $1.2 trillion worth of trade among the three nations.

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So there was so talks about what happen if Trump didn't sigh the new agreement, so I thought it would be important to discuss why this deal is important to Canadians. So in Canada some analysts are saying the new tariffs averaging about 4.2 percent and it would reduce Canada's GDP (Gross Domestic Products) 2.5 percent which would be every bad for the economy in Canada

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WASHINGTON - It's a refrain frequently heard in Canada: That ending NAFTA wouldn't change much in economic relations with the United States, because the countries could simply pull their older agreement off the shelf, dust it off, and persist in trade without tariffs.

It's also wrong, some analysts say.

A few people interviewed this week disputed the idea that the original Canada-U.S. Free Trade Agreement of 1987 would automatically snap back into place if NAFTA disappears, an increasingly relevant topic as hostilities mount in the trilateral trade talks.

"That's so naive," said Sarah Goldfeder, a former U.S. diplomat in Mexico and Canada who is following the trade negotiations at Earnscliffe Strategy Group in Ottawa, on the idea of an automatic snap-back.

"You'd have to re-implement (the original agreement)."

That would raise new challenges, she said. First of all, she said the current American political climate would not make for an easy re-implementation. She said there would be demands for a renegotiation within the U.S., and the parties would soon be back at the table struggling with many of the same sticking points.

"There's no way this (Trump) administration would do this (re-implementation) without negotiating a new agreement," she said.

"So you're still going to have to negotiate all the same irritants."

The current talks have become bogged down amid huge gaps between the countries - and not only in material things like dairy, automobiles, and public works' Buy American rules, but in basic philosophical differences on the architecture of a trade deal.

The Trump administration's proposals would make it easy to cancel the agreement within five years, and hard for countries to count on stable long-term access to each other's markets.

The president says he'll cancel NAFTA if he can't get a deal.

Insiders now view termination as a real possibility, raising unprecedented procedural questions - like what the rules are for cancelling a trade deal and, of particular importance to Canadians, what the rules are for reviving an old one.

The suspension of the old agreement was signalled in diplomatic notes exchanged between the countries. The 1993 notes were brief and vaguely worded. The countries complimented each other on their new deal with Mexico, and confirmed that each would make separate arrangements to suspend the old deal.

The American suspension is laid out in Section 107 of the law implementing NAFTA in that country in 1994. The earlier deal negotiated by Brian Mulroney and Ronald Reagan was to be suspended, and, according to the law, it would remain suspended until such time as that suspension might be "terminated."

It doesn't define how you "terminate" a suspension. But a trade consultant who two decades ago advised Canada's parliamentary committee on NAFTA implementation said it obviously requires someone to do something.

"It's been suspended. Somebody has to un-suspend it," Peter Clark said.

That someone could be Congress. And even if Congress does successfully vote to re-introduce the old FTA, its vote would either require the approval of President Donald Trump, or an overwhelming, two-thirds majority vote in Congress to overcome a presidential veto.

A Washington trade expert says lawmakers could also try sneaking bits of trade legislation into larger bills - it's a common practice in American lawmaking to tack on unrelated items to a bill.

But Eric Miller says his own congressional sources have already told him: American lawmakers would expect a vote on any FTA re-implementation. He's warning Canadians now - over what he calls a dangerous complacency that there's some insurance policy if NAFTA dies.

"I think it's highly questionable that this insurance policy will pay out, and pay out in full, in the case of an accident," he said.

"I'm highly doubtful the agreement would come back into place and everyone would be fine with it... If Congress believes they're going to have to vote on it, then they're going to have to vote on it."

The U.S. Constitution, after all, gives Congress the power over international commercial agreements. Historically, Congress has merely lent that power to the president, and worked out a compromise set of rules known as fast-track legislation.

Now some analysts suggest the Congress could try wresting back its rightful power, block any Trump effort to cancel NAFTA, and avoid all this uncertainty over the 1993 deal, the 1987 deal, and trade in general.

But a former U.S. trade czar expresses some doubt this will happen.

Barack Obama's trade representative Michael Froman points to the track record of this current Congress - which has failed to pass a single piece of policy legislation of any significance.

"I think it would require a lot of action, a lot of consensus in Congress. And that may emerge," Froman told the Council on Foreign Relations this week.

"But so far, there haven't been a lot of profiles in courage."

The end of free trade in North America would leave new tariffs averaging 3.5 per cent in the U.S., 4.2 in Canada, and 7.1 in Mexico. Some analysts say that would reduce Canada's GDP by about 2.5 per cent on a long-term basis.

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If NAFTA dies, the old Canada-U.S. free trade agreement would live on, right? Not so fast, Canada

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WASHINGTON - It's a refrain frequently heard in Canada: That ending NAFTA wouldn't change much in economic relations with the United States, because the countries could simply pull their older agreement off the shelf, dust it off, and persist in trade without tariffs. It's also wrong, some analysts say.

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The CCFTA agreement has hit a major milestone between Canada and Chile, this agreement has been made and renewed over 20 years ago and that means 20 years of creating many job opportunities for both countries

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In 1997 the Canada- Chile Free Trade agreement was made and since then it has help both economies. In 2016, the agreement made 2.4 billion dollars. And that has help create jobs especially for Chileans. Also I have read so where that it has help create temporary entry to the country for the Chilean people. I have learned that it is important to have agreements with second world nations because it opens more opportunities

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In force since July 1997.
2017 marks the 20th anniversary of the Canada-Chile Free Trade Agreement (CCFTA). Bilateral merchandise trade has more than tripled since the Canada-Chile FTA came into force, growing to $2.4 billion in 2016. At the end of 2016, the stock of Canadian investment in Chile was $16.5 billion, making Chile the top direct investment destination in South and Central America. On June 5, 2017, the Honourable François-Philippe Champagne and Heraldo Muñoz, Chile's Minister of Foreign Affairs signed Amending Agreements to modernize the CCFTA. The modernized CCFTA will support an open, inclusive and progressive rules-based trading environment.

For more information, please see: background information on the Canada-Chile Free Trade Agreement.

Bilateral Agreements

Amendments to the Canada-Chile Free Trade Agreement

Related Links

Contact Point

If you have questions or comments about this free trade agreement or the environmental and labour cooperation agreements, we would like to hear from you. Please contact Global Affairs Canada at the following address:

Trade Policy and Negotiations Division I (TPE)
Global Affairs Canada
Lester B. Pearson Building
125 Sussex Drive, Ottawa, ON K1A 0G2
Fax: 613-944-0757
Email: consultations@international.gc.ca

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In force since July 1997. 2017 marks the 20th anniversary of the Canada-Chile Free Trade Agreement (CCFTA). Bilateral merchandise trade has more than tripled since the Canada-Chile FTA came into force, growing to $2.4 billion in 2016.