The Sun Community News
October 1, 2018
By: PETE DEMOLA
PLATTSBURGH | President Donald Trump on Monday announced a new trade deal between the U.S., Canada and Mexico that will replace the North American Free Trade Agreement, or NAFTA.
“We have negotiated this new agreement based on the principle of fairness and reciprocity,” said Trump. “To me, it’s the most important word in trade because we have been treated so unfairly by so many nations.”
The new deal comes after 14 months of negotiation that threatened to upend one of the U.S.’ closest allies and made Plattsburgh-area business officials skittish.
Among other provisions, the newly-minted United States Mexico Canada Agreement (USMCA) creates an “effective protection” against potential auto tariffs which the North Country Chamber of Commerce (NCCC) said could have been problematic for regional transportation equipment companies.
NCCC President Garry Douglas called the deal “terrific news for both countries but especially crucial to our unique bi-national region.”
The new deal “significantly increases” U.S. access to the Canadian dairy market, said Douglas, and preserves the existing dispute resolution process, which he said has proven to be effective.
“Our one wish is that it would have also resolved the current steel and aluminum tariffs,” Douglas said, “but indications are that those are being addressed through separate discussions.”
Northern New York is a magnet for direct foreign investment from Canada based on cross border supply chains.
NCCC has estimated 15 percent of the workforce in Clinton County is employed by a Canadian or border-related employer, making the relationship the key driving force in the regional economy.
Canadian companies that have established a presence in Plattsburgh include Bombardier, B3CG and Novabus.
NCCC also believes the deal will help unfreeze the interest of Canadian companies in the U.S. market, including consideration of investments in the U.S.
“The uncertainty of the NAFTA negotiations has had this dynamic on pause,” Douglas said.
The deal also whittled away some of the protectionist safeguards Canada implemented to protect their domestic dairy industry, leading to a glut of supplies in the U.S.
As part of the deal, Canada will be required to open up its dairy market to U.S. farmers and will eliminate a policy that made it cheaper for domestic processors to buy supplies of ultra-filtered milk, a concentrated ingredient used to boost protein content in cheese and yogurt, Bloomberg reported.
“While the system helped support a wave of new processing capacity that’s being built across Canada, U.S. farmers complained it effectively blocked imports and dragged down world prices,” the outlet reported.
The concessions, reported the news agency, “will boost the amount of milk, cheese and cream the U.S. can ship tariff-free, including increasing fluid milk exports to 50,000 metric tons by year six of the agreement.”
Rep. Elise Stefanik (R-Willsboro), who met with Trump earlier this year to bend his ear on trade, has been a strong advocate for “modernizing” the trade agreement.
“I have been a strong advocate for modernizing our trade agreement with Canada and Mexico in Congress, and I am pleased that this framework will open up the Canadian dairy markets for our North Country farmers who have been struggling,” Stefanik said in a statement. “Canadian trade has supported millions of jobs since NAFTA took effect, and reaching this agreement is critical to the continued success of our region.”
U.S. Sen. Minority Leader Chuck Schumer of New York acknowledged he initially voted against NAFTA and opposed it for years.
“The president deserves praise for taking large steps to improve it,” Schumer said. “However, any final agreement must be judged on how it benefits and protects middle-class families and the working people in our country.”
Schumer said he is awaiting further details on the dairy sector and “real enforcement” of labor provisions.
“The labor provisions are good, but too often they are written into trade bills and never enforced,” he said.
“If a final agreement is signed by all three countries, I also look forward to working with my colleagues in Congress to write implementing legislation to ensure the deal actually achieves these goals.”
Despite the new deal, tariffs remain on imported steel from Canada and Mexico.
Trump indicated on Monday those measures will continue.
“We now need to resolve the remaining tariffs and get things active again,” Douglas said. “And we need to secure approval by Congress, hopefully in December.”
Beekmantown Supervisor Sam Dyer, who is a dairy farmer by profession, said he was heartened at the relief for dairy farmers, but looked forward to hearing more details.
“We can only hope that’s the case,” Dyer said on Monday. “We’re cautiously optimistic that that’s going to happen.”
Dyer said he remained wary of Canadian dairy exports entering the market.
“This is pretty scary times we’re in right now,” Dyer said.