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After more than a year of negotiating a new North American Free Trade Agreement(NAFTA), Canada, the U.S. and Mexico have finally inked a trade deal.
Foreign Affairs Minister Chrystia Freeland and United States Trade Representative Robert Lighthizer released a joint statement Sunday night announcing the new deal, which will be called the United States-Mexico-Canada Agreement (USMCA).
READ MORE: Read the full text of the new United States, Mexico and Canada 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 (USMCA),” the statement read.
“USMCA 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.”
U.S. President Donald Trump is to sign the $1.2 trillion trade agreement at the end of November and will then submit it to Congress, an official said.
WATCH: Canadian NAFTA negotiations coming down to the wire
The deal came down to the wire before a midnight deadline Sunday set by U.S. Congress, with Prime Minister Justin Trudeau convening a cabinet meeting at 10:00 p.m. Sunday evening in Ottawa.
“It’s a good day for Canada,” Prime Minister Justin Trudeau told reporters after a late-night cabinet meeting to discuss the deal, which triggered a jump in global financial markets.
The NAFTA negotiations have been in the works since Aug. 16, 2017. The goal was to “modernize” the trade pact, with U.S., Mexican and Canadian. Officials initially expected to conclude negotiations in early 2018 due to elections later in the year.
What’s in the new agreement?
Senior White House administration officials said the deal is a big win for Mexico and Canada, and the deal includes ambitious new market access, including U.S. access to the dairy market in Canada. The officials said that a new regime has been agreed upon that will prevent supply management from being externalized outside of Canada.
Canada has agreed to provide U.S. dairy farmers access to about 3.5 percent of its approximately $16 billion annual domestic dairy market. Although Canadian sources said its government was prepared to offer compensation, dairy farmers reacted angrily.
READ MORE: Here are key details of the new North America free trade deal
Chapter 19, the dispute resolution mechanism, which was a major sticking point in the negotiations, will be kept with no substantial changes.
The deal also requires a higher proportion of the parts in a car to be made in areas of North America paying at least $16 an hour, a rule aimed at shifting jobs from Mexico.
Canada and Mexico each agreed to a quota of 2.6 million passenger vehicles exported to the United States in the event that Trump imposes 25 per cent global autos tariffs on national security grounds.
WATCH: Trump’s auto tariffs could impact Canadian consumers
The quota would allow for significant growth in tariff-free automotive exports from Canada above current production levels of about 2 million units, safeguarding Canadian plants. It is also well above the 1.8 million cars and SUVs Mexico sent north last year.
But the deal failed to resolve U.S. tariffs on Canada’s steel and aluminum exports.
A review of the deal will come up every six years, officials said.
-With files from Reuters and Eric Stober
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