Despite moments of drama while updating NAFTA, the agreement in principle reached last night is being described Monday as a major win for Canadians but one that still faces uncertainty ahead.
Speaking with reporters from the National Press Theatre on Monday, Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland touted the benefits of the renegotiated NAFTA, which is now being called the United States Mexico Canada Agreement (USMCA), while cautioning there are challenges yet to come in actually ratifying the deal.
Here are some of Prime Minister Justin Trudeau’s comments about the deal:
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“This is a victory for Canadians,” said Freeland, who has led the negotiations over the past 13 months.
Trudeau, standing at her side, praised her “tireless, relentless” work to secure an agreement in principle but warned the deal still faces challenges in getting passed through both the American and Mexican legislatures, particularly with midterms scheduled for November in the U.S. and the Mexican government set to change hands in December.
“Nothing is guaranteed yet,” Trudeau said.
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“There are still some uncertainties … That being said, today’s announcement is a major stride forward. This is the path we must follow to usher in a new era of economic prosperity and stability.”
The new deal, reached at the eleventh hour as the clock ticked down to a midnight deadline, maintains the dispute resolution mechanism that was crucial for Canada throughout negotiations but makes several key concessions in allowing increased American access to the Canadian dairy market.
It also does away with a controversial class of pricing rules introduced in 2016 and 2017 that significantly upped the cost for foreigners to export milk proteins into Canada, a product that was not addressed in the original NAFTA deal.
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As well, the new deal increases the quota of auto parts that must be made in North America by manufacturers wanting to sell cars in the North American market.
It also requires a higher percentage of the cars sold in North America to be made by workers making at least $16 per hour.
It also includes a side letter essentially exempting Canada and Mexico from future auto tariffs that the Trump administration may choose to impose.
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But it does not lift the steep tariffs on steel and aluminum imposed earlier this year by Trump.
Freeland said those remain an ongoing topic of discussion.
“That’s something we continue to discuss with the United States,” she said. “We have a little bit of wind in our sails and we are going to very much continue to work on this issue but it is separate from the NAFTA talks.”
Both she and Trudeau said that despite the moments of drama throughout the talks, the focus remained on making sure Canada could maintain key provisions such as cultural exemptions, protections for the middle class, and dispute resolution.
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“In all negotiations, there are low and high points,” Trudeau said, noting that in particular, achieving the latter was a significant moment.
“A key moment for me was when we realized that we were going to have an intact Chapter 19 … When we got there, that was an excellent sign for me.”
The deal is expected to be signed by Dec. 1, which will be shortly before the House of Commons rises for winter break.
However, signing is not the same thing as ratifying the deal, which requires the legislatures of each member country to approve the agreement.
For Canada, that attaches a looming deadline in the form of the upcoming elections in October 2019 and the end of the parliamentary sitting in June 2019.
Once the deal is signed in December, the federal government will need to introduce legislation to actually ratify and implement it.
That bill will need to follow the same legislative process as any other, which will take months to gain approval from the various stages of review needed in both the House of Commons and the Senate before it can receive royal assent and become law.
And it will need to do it all that before the parliamentary session ends in June or risk the deal becoming a campaign issue.
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Freeland there is still work to be done both on ratifying the deal and figuring out how to compensate Canadian dairy farmers for the increased market access offered to the Americans, but that that work remains ongoing.
“It’s easy to be overtaken by the dramatic moments but we have not been,” she said.
“We have always just focused on the reality that this is a good deal for everyone, and we’ve always believed that we were going to get here.”
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