Donald Trump claimed that Nafta (the North American Free Trade Agreement) was biased against the USA (despite it being an accord that the US government negotiated, but then it wasn’t a Trump deal, so it must be bad by definition). His administration put pressure on Mexico and Canada to agree to changing some of the terms of the agreement and he now proclaims that the new regime, USMCA (United States Mexico and Canada Agreement) is: “truly historic” and “the biggest trade deal in United States history”.
The putative USMCA will grant US farmers an improved access to the Canadian dairy market and protect Canadian automotive production from the threat of US sanctions, amongst other things. The Canadian Prime Minister, Justin Trudeau said: "We had to make compromises, and some were more difficult than others. We never believed that it would be easy, and it wasn't, but today is a good day for Canada."
The revamped agreement will retain a trade dispute mechanism, something that Canada strongly sought to maintain. This is likely to protect the Canadian lumber industry and other sectors of its economy from falling foul of US anti-dumping tariffs. A trade off for this was that Canada has granted the US agricultural sector access to 3.5% of its dairy sector which is worth $16 billion in total. It is believed that Canada may offer support to its dairy sector to compensate farmers whose interests are hurt by the deal.
With continuing talk that the Trump administration may put tariffs on car imports, a caveat to the deal allows Canada to export 2.6 million vehicles to the US which would be exempt from the putative 25% tariff that is being mooted (the current export level is about 2 million units). However, the new agreement has not resolved the current trade war between the US and Canada over aluminium and steel exports.