Nafta survives after US extracts concessions

The North American Free Trade Agreement (Nafta) will be preserved under a different name and terms slightly more beneficial for the US following the conclusion of US-Canadian talks late yesterday.

Canada agreed to join the preliminary agreement that the US and Mexico finalized in August. The new agreement — to be dubbed the US Mexico Canada Agreement (USMCA) — will preserve the duty-free flow of energy commodities between the three countries.

The new agreement will narrow the scope of investor-state dispute settlement provisions, despite the preferences of the North American energy industry. But it addresses their key concern of offering protection against any changes that future governments in Mexico City may seek in weakening the terms of access to Mexico's energy sector following recent reforms.

Contrary to earlier statements from the US Trade Representative's office, senior US officials said that the signing of the agreement will not immediately lead to lifting of tariffs on imports of steel and aluminum to the US. The parties opted to pursue tariff negotiations on a separate track.

President Donald Trump hailed the agreement as a major victory. The US administration casts it as validation of Trump's tactics in trade negotiations.

The agreement will have to be approved by legislatures in three countries.