Canada Agrees to Join USMCA, NAFTA Replacement
Canada and the U.S. reached a deal on NAFTA 2.0 late Sept. 30, which was announced a half hour before the deadline to release the text.
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Canada agreed to eliminate Class 7 and Class 6 dairy six months after the agreement goes into effect. Class 7 was a recent addition to Canada's dairy supply management system, and closed a market that had been open to farmers in the northern U.S. to sell ultra-filtered milk, used in making cheese.
As with Mexico, the U.S. promised not to levy Section 232 tariffs on autos and auto parts up to a cap, if Canadian vehicles were not to meet the auto rules of origin. For any Section 232 tariff, the government agreed to a 60-day period of consultations with its partners.
The language on how there will be a transition from the current NAFTA is not yet written.
Finance Committee Chairman Orrin Hatch welcomed the news. Rep. Richard Neal, the ranking member of the House Ways and Means Committee, released a statement that said, "We will need to assess whether this agreement makes real improvements to the terms of the existing NAFTA or President Obama’s TPP.”