Following over a year of negotiations aimed at revamping NAFTA, the US and Canada announced in a statement late Sunday that they finalized the United States-Mexico-Canada Agreement (USMCA).
The USMCA is an updated version of NAFTA and will replace the nearly 25-year-old agreement.
“Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement,” US Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said in a joint statement.
The agreement “will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region,” the statement added.
Details of the trade deal have yet to be published; however, removing the cap on dairy and limiting the export of cars seem to be included in the document.
Alongside changes to the dairy market, officials said the USMCA included more job security for workers, tough new environmental rules, and updated trade relations to cover the digital economy and provide “groundbreaking” intellectual property protections.
In addition, the USMCA added provisions to prevent “manipulation” of the trade rules, including covering currency values and controls over outside countries trying to take advantage of the duty-free market, according to reports.
Under the USMCA, the trade pact will expire after 16 years; however, it will be reviewed every six years.
President Donald Trump had described NAFTA as a “disaster” that had inflicted suffering and huge damage to the American people and businesses.
During his presidential campaign, Trump repeatedly said that he would pull the US out of the deal, which had been signed by the US, Canada, and Mexico back in 1994.
The president claimed NAFTA , which governed more than $1 trillion in trade, had led to the outsourcing of American businesses and the loss of a multitude of US jobs.
Canada is the largest export market for American products while more than two-thirds of Canadian exports go to the United States, equivalent to 20 percent of its Gross Domestic Product.
The comes as the US has launched a trade war on several fronts over the past months, as part which it has slapped tariffs on imports from Canada and Mexico, among other nations.
Under the new deal, Canada is reported to have secured some protections for its automobile industry against potential US tariffs.