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New North American Trade Deal Launches Under Cloud of Disputes, Coronavirus

Reuters

   WASHINGTON/MEXICO CITY/OTTAWA - A modernized U.S.-Mexico-Canada trade
   pact took effect Wednesday, ensuring continuity for manufacturers and
   agriculture, but the threat of disputes is exposing cracks in what was
   meant to be a stronger North American fortress of competitiveness.

   As the deal kicks in, the Trump administration is threatening Canada
   with new aluminum tariffs, and a prominent Mexican labor activist has
   been jailed, underscoring concerns about crucial labor reforms in the
   replacement for the 26-year-old North American Free Trade Agreement.

   The U.S.-Mexico-Canada Agreement includes tighter North American
   content rules for autos, new protections for intellectual property,
   prohibitions against currency manipulation and new rules on digital
   commerce that did not exist when NAFTA launched in 1994.

   Trump had lambasted NAFTA as the "worst trade deal ever made" and
   repeatedly threatened to end it.

   Virus-related recessions

   USMCA launches as the coronavirus has all three countries mired in a
   deep recession, cutting their April goods trade flows -- normally about
   $1.2 trillion annually -- to the lowest monthly level in a decade.

   "The champagne isn't quite as fizzy as we might have expected -- even
   under the best of circumstances -- and there's trouble coming from all
   sides," said Mary Lovely, a Syracuse University economics professor and
   senior fellow at the Peterson Institute for International Economics in
   Washington. "This could be a trade agreement that quickly ends up in
   dispute and higher trade barriers."

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