President Donald Trump celebrated a political victory today after signing a continental trade deal with Mexico and Canada to replace NAFTA on the sidelines of the much-anticipated G20 summit.
If approved by Congress, the new deal — rebranded as the United-States-Mexico-Canada Agreement, or USMCA — moves Trump closer toward delivering on a campaign promise following more than a year of tense negotiations among the three countries. (The president has been critical of NAFTA during his time in office, memorably calling it “the worst deal ever made.”)
Although it’s expected to be easily ratified in Mexico and Canada, the pact will face a more challenging path in a soon-to-be Democratic-led House. In a statement released just after the signing, Senate Minority Leader Chuck Schumer said that the deal would have to “prove to be a net benefit to middle-class families and working people in our country” to win the support it needs to pass.
Trump, however, expressed confidence in the deal in its current form.
Watch on FN
“This is a model agreement that changes the trade landscape forever, and this is an agreement that first and foremost benefits working people — something of great importance to all three of us here today,” he said.
Both departing Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau inked the new treaty as they continue to seek exemptions from the steel and aluminum tariffs imposed by the Trump administration in the summer.
The U.S. and Mexico reached a bilateral agreement in late August, threatening to move forward without Canada, but the latter struck a last-minute deal ahead of the September deadline.
“The new North American free trade agreement maintains stability for Canada’s entire economy — stability that’s essential for the millions of jobs and middle class families across the country that rely on strong, reliable trading relationships with our closest neighbors,” Trudeau said.
Matt Priest, president and CEO of the Footwear Distributors & Retailers of Americas, called the USMCA a “monumental step” for the three countries, with no notable overhauls to provisions for the footwear industry.
“There might be some ease in customs and the movement of goods, but all the important things haven’t changed,” he said, citing footwear’s duty-free treatment under NAFTA. “We will be monitoring it closely, pushing for its passing as soon as possible and continuing to advocate for the industry as best as we can.”
Held during the early-morning hours in Buenos Aires, Argentina, the ceremonial signing comes just a day before Trump is scheduled to meet with Chinese President Xi Jinping to discuss their escalating trade war.
“It clearly ratchets up the temperature in China, showing that the U.S. can take a lead and negotiate a change in the trading dynamic,” said Rick Helfenbein, president and CEO of the American Apparel & Footwear Association. “We literally don’t know what’s going to happen tomorrow, so everybody has to run their business strategically with a plan for what tomorrow’s going to bring.”
This story was updated with comments from the AAFA.
Industry Insiders React: US and Mexico Strike New Deal That Could Replace NAFTA, All Eyes on Canada
What the New US-Canada-Mexico Trade Agreement Means for Shoe Companies