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article imageTrudeau sets out to sell Canadians on trade pact

By Michel COMTE (AFP)     Oct 1, 2018 in Politics

Canadian Prime Minister Justin Trudeau called the new continental trade agreement with the United States and Mexico "a good day for Canada," but must now sell it to dairy farmers, unions and voters.

The eleventh-hour deal was reached late Sunday after more than a year of tough negotiations to replace a 24-year-old trade pact that US President Donald Trump had labeled a "disaster."

Canadian dairy farmers immediately denounced the new US-Mexico-Canada Agreement for easing market protections, but auto workers praised it for safeguarding the nation's top export -- cars.

The political impact of the agreement could soon be tested in provincial elections being held Monday in Quebec, a key dairy producing province.

Trudeau put the best face on the deal, welcoming it in a late night call with Trump as "a new and modern trade agreement."

They "stressed that the agreement would bring the countries closer together, create jobs and grow the middle class, enhance North American competitiveness, and provide stability, predictability, and prosperity to the region," according to a readout.

"It's a good day for Canada," Trudeau told reporters after a late Sunday cabinet meeting.

- Dairy farmers unhappy -

In Quebec, politicians lamented that its dairy sector was paying the biggest price in order to get a deal.

"The worst-case scenario has been realized," Parti Quebecois leader Jean-Francois Lisee said.

Canada's supply-managed system controls the production and price of milk and poultry and ensures stable incomes for Canadian farmers.

Preserving the protections for dairy was politically important to Trudeau, whose Liberal party faces elections next year.

But Trump had threatened to leave Canada out of the trade deal altogether if an agreement could not be reached by midnight Sunday, confronting Trudeau with the prospect of broader disruptions to the Canadian economy.

The Dairy Farmers of Canada warned that giving US farmers an additional 3.59 percent slice of the Can$20 billion (US$16 billion) Canadian milk and cheese market "will have a dramatic impact not only for dairy farmers but for the whole sector."

"This has happened, despite assurances that our government would not sign a bad deal for Canadians," it said. "We fail to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood."

But pundits noted that this access is similar to what was offered in a free trade deal with Europe and in the Trans Pacific Partnership.

And on the streets of Canadian cities, a collective sigh of relief was expressed by bystanders interviewed by local media, happy that some stability would now return in the Canada-US relationship.

- The darker alternative -

"We can rejoice that we are not facing the alternative, darker outcome (of no deal) despite some important reversals from the original trade pact," professor Louis Belanger of the University of Laval in Quebec told AFP.

He and others listed as wins for Canada: keeping dispute resolution panels that have been used in the past to successfully challenge US anti-dumping and countervailing duties on its lumber and other key sectors; continued access to the US auto market; and, an exemption for Canada's cultural industries.

"Since Prime Minister Trudeau did not give in on these key issues, I don't think he'll pay a political price at the polls next year," Belanger said.

"Most Canadians blame the American administration for the mess we're in, and I think Justin Trudeau will be recognized for saving the furniture," he told AFP.

Some suggested that greater patent protections for some drugs will make them costlier, but Dias said he expected the government to pitch a national pharmacare plan next year that would mitigate the highefr prices.

"Don't call it NAFTA, at least not while Donald Trump is listening," CIBC World Markets analyst Avery Shenfeld said in a research note.

"But the good news is like a rose by any other name, a deal reached last night between the US, Canada and Mexico will smell pretty sweet relative to the alternative of an all-out trade war."

He predicted "the deal won't be a huge game changer for Canadian growth."

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