It looks like North America will remain a free trade zone after all. Late last night, Canada agreed to join the U.S. and Mexico in an updated version of the North American Free Trade Agreement. It will no longer be called NAFTA but rather the USMCA. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: President Trump has long railed against NAFTA, calling it one of the worst trade deals ever negotiated. But in the White House Rose Garden this morning, Trump celebrated what was billed as a new and improved trade deal. Trump called it a positive step for both the country and the world.


PRESIDENT Donald Trump: Once approved by Congress, this new deal will be the most modern, up-to-date and balanced trade agreement in the history of our country with the most advanced protections for workers ever developed.

HORSLEY: In signing on to the deal, Canada agreed to open up its long-protected dairy market, at least a little bit. Trump says that means new opportunity for American dairy producers to sell their products north of the border.


TRUMP: Including milk, butter, cheese, yogurt and ice cream, to name a few. I want to be very specific.


HORSLEY: But Canada is still expected to buy more than 90 percent of its dairy products from Canadian suppliers. Former U.S. Agriculture Secretary Tom Vilsack, who now heads the Dairy Export Council, says the new deal is an improvement for American dairy farmers but not by much.

TOM VILSACK: We're looking at an incremental increase in access. We're not certainly looking at an opening-wide of the market, but we are seeing an increase.

HORSLEY: More importantly perhaps, the agreement is designed to prevent Canadian dairy farmers from dumping surplus skim milk powder on the world market at what the U.S. views as artificially low prices. In exchange for these concessions, the U.S. agreed not to scrap a NAFTA-era process for resolving trade disputes even though Trump wanted to. Preserving that arbitration process was a top priority for Canadian Prime Minister Justin Trudeau.


PRIME MINISTER JUSTIN TRUDEAU: When your trading partner is 10 times your size, you need rules. You need a level playing field.

HORSLEY: The U.S. and Mexico had reached a tentative trade deal more than a month ago, but Canada didn't agree to sign on until late last night, just hours before a White House deadline. While Trudeau cautions there are still hoops to jump through before the deal is finalized, the threat of a trade agreement that left Canada on the sidelines has been averted.


TRUDEAU: What I can say is that free and fair trade in North America is in a much more stable place than it was yesterday.

HORSLEY: Markets rallied on the news with the Dow Jones Industrial Average gaining nearly 200 points. Trump, Trudeau and Mexican President Enrique Pena Nieto are expected to sign the deal within 60 days, just before Pena Nieto leaves office. It will then be up to the incoming U.S. Congress to decide whether to approve the agreement.

The president's trade representative, Robert Lighthizer, says he expects the deal to win backing from a lot of Democrats as well as Republicans. Celeste Drake, who oversees trade policy for the AFL-CIO, says while she still has a lot of questions about the fine print, the administration has been attentive to the concerns of organized labor.

CELESTE DRAKE: Whatever else is going on in other parts of the administration, Ambassador Lighthizer has been very serious about listening to our ideas and wanting the support of working families.

HORSLEY: White House aides say the new deal is a vindication of the president's hard-nosed negotiating tactics which have included stiff tariffs on U.S. allies and the threat of even harsher protectionist measures. The deal leaves intact for now U.S. tariffs on imported steel and aluminum from Canada and Mexico as well as the retaliatory tariffs on U.S. exports the North American neighbors imposed in response. Scott Horsley, NPR News, Washington.






















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