GUIDANCE

North America Has a New Trade Pact. Now What?

Nov 30, 2018 | 19:33 GMT

Mexican President Enrique Pena Nieto (left), U.S. President Donald Trump (center) and Canadian Prime Minister Justin Trudeau sit together after signing a new free trade agreement in Buenos Aires, Argentina, on Nov. 30. Trudeau, meanwhile, conspicuously avoided showing his signature for the cameras.

(MARTIN BERNETTI/AFP/Getty Images)

Highlights

The new trade agreement has been signed, but its ratification will likely be slow in all three countries.
Although the countries did not sign any binding deal on auto quotas, the Trump administration could take action that would effectively forestall U.S. automakers from moving production to Canada and Mexico.
The new NAFTA deal has shown that other countries negotiating new trade deals with the United States cannot expect Washington to lift tariffs it has already imposed on their products.

As expected, Canada, Mexico and the United States signed a replacement agreement for the North American Free Trade Agreement (NAFTA) on Nov. 30 on the sidelines of the G-20 Summit in Buenos Aires. But while the countries' respective leaders -- the United States' Donald Trump, Mexico's Enrique Pena Nieto (on his last day in office) and Canada's Justin Trudeau -- were all present, they did not put pen to paper themselves. Trudeau, for one, categorically refused to sign the agreement himself unless the United States removed aluminum and steel tariffs. Instead, the three leaders signed letters authorizing their lead negotiators on the trade agreement to sign the new deal, which, incidentally, all three have chosen to call by a different name. There's the United States-Mexico-Canada Agreement, the Canada-United States-Mexico Agreement and the Mexico-United States-Canada Agreement. (For the sake of clarity, Canadian Foreign Minister Chrystia Freeland said she was just calling...

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