Prime Minister Justin Trudeau said Friday that Canada is “ready” to potentially renegotiate the Canada-United States-Mexico Agreement (CUSMA) after Donald Trump pledged to reopen the free trade agreement if he returns to the White House.
Trump told the Detroit Economic Club on Thursday that he would invoke the six-year review provision under the agreement and seek new protections for the American auto industry from Chinese interests. US Vice President Kamala Harris, who is running against Trump in the November elections, said she intends to review the agreement.
Speaking to reporters in Laos at the end of an ASEAN summit this week, Trudeau said his government will continue to stand up for Canadian workers and industries as it did during the tense negotiations with the first Trump administration that led to the CUSMA agreement, often referred to as “the new agreement.” NAFTA.
“We’ve been here before,” Trudeau said.
He said Canada has “bucked the trend” of countries moving away from international free trade agreements toward more protectionist and “isolationist” economic strategies by successfully negotiating agreements with European and Asian partners, in addition to CUSMA.
We did this by standing up for Canadian jobs, by showing how integrated our economies really are, in the case of the United States. “We are willing to do it again if necessary.”
CUSMA, known as USMCA in the US, replaced the decades-old North American Free Trade Agreement (NAFTA) when it came into force in 2020 – leaving it up for review in 2026. The three countries will have to confirm in writing if they want to Extending or renegotiating the agreement.
During his speech in Detroit, Trump announced that “when I take office, I will formally notify Mexico and Canada of my intention to activate the six-year renegotiation provisions of the United States-Mexico-Canada Agreement that I have entered into.”
“Oh, I’m going to have a lot of fun,” he added.
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Much of Trump’s speech focused on the American auto industry, which is headquartered in Detroit. He indicated that he wants to add new provisions to CUSMA that would prevent Chinese auto companies from building factories in Mexico and taking advantage of Mexico’s access to the U.S. auto market.
CUSMA’s rules of origin require higher levels of North American parts in vehicles sold in the three countries than NAFTA, which Trump said China is also trying to exploit.
“I will also seek strong new protections against transshipment, so that China and other countries cannot smuggle their products into the United States tax-free through Mexico at the expense of our workers and supply chains,” Trump said.
“They’re smuggling this stuff. They’re not paying anything. We’re going to have very strong language on this.”
Chinese automaker BYD It has become a major supplier of vehicles to Mexico It is said to be planning to build its next automobile factory in the country Bloomberg reported that the company is waiting Until after the US elections to make the final decision.
Trump has vowed to impose “any tariffs needed” to keep Chinese auto factories out of Mexico — even proposing to impose tariffs of up to 1,000 percent on those companies.
“I don’t want to see them,” he said.
Trump did not mention any complaints he had with Canada during his speech. But Canada, which briefly faced US tariffs on steel and aluminum during the North American Free Trade Agreement (NAFTA) negotiations, is bracing for Trump’s pledge to impose sweeping tariffs on all foreign imports of between 10 and 20 per cent – a measure that economists say could throw Canada is in chaos. recession.
Harris promises to review CUSMA
Harris has blamed CUSMA, which she calls “Trump’s trade deal,” for the loss of American manufacturing jobs during Trump’s presidency. She also referred to it Claim of the United Auto Workers Union That Stellantis, a major automaker, is seeking to move some production from the U.S. to Canada — a claim Stellantis has denied — is something Harris said has been made “very easy” through CUSMA.
Harris, who was one of only 10 U.S. senators to vote against CUSMA, said in a statement last month that she would reopen the agreement as president.
“Many who voted for this deal conditioned their support on the review process, which I will use as chair,” she wrote.
Although Harris said she “knew that protecting our country and its workers was not enough” when she voted against CUSMA in 2020, she said at the time that her decision was based on “inadequate” environmental provisions.
The offices of the Canadian Chief Economist and the US Trade Representative said CUSMA has had a positive impact on their countries’ economies, especially in the auto sector.
Kimberly Clausing, an economist and senior fellow at the Peterson Institute for International Economics, told Global News that while both Trump and Harris make big claims about CUSMA on the campaign trail, they may think twice when they take office.
“If you’re going to spend political capital to do international economic things, you should try to be bolder and do things with more substance, rather than tinker with a fundamentally successful agreement,” she said.
Clausing also echoed Trudeau’s view that CUSMA had strong bipartisan support at the time, despite Harris’ opposition.
“I don’t think there was anything that happened at that time that would make one rethink that,” Klausing said.
&Copy 2024 Global News, a division of Corus Entertainment Inc.
