Trade experts say the impact of the new US-Mexico-Canada Agreement will be modest. Canada and Mexico already represent the top two export markets for US goods.

US President Donald Trump signs a new North American trade agreement with Canada and Mexico, during an event at the White House, Wednesday, Jan. 29, 2020, in Washington.
US President Donald Trump signs a new North American trade agreement with Canada and Mexico, during an event at the White House, Wednesday, Jan. 29, 2020, in Washington. (AP)

US President Donald Trump on Wednesday signed the new North American trade pact with Canada and Mexico into law, pronouncing a "glorious future" for US industry.

It was another opportunity for Trump to tout successes in the midst of an impeachment trial where he is fighting charges of abuse of office and obstructing Congress. 

On Tuesday he announced a Middle East peace plan – rejected immediately by the Palestinians – and earlier this month he signed a truce in his trade war with China.

But even if the new USMCA trade deal with America's neighbours was crafted in close consultation between Trump's Republicans and the Democrats, the president pointedly didn't invite any of the Democratic leaders to his big White House signing ceremony.

The USMCA replaces the 1994 North American Free Trade Agreement, or NAFTA, which Trump has long targeted, saying that it resulted in shipping US jobs abroad.

"Today, we are finally ending the NAFTA nightmare," he said at the White House.

Analysts say USMCA retains many elements of NAFTA, a mammoth deal that created a free trade zone across all of North America, shaking up entire industries and supply chains.

Economists say that overall NAFTA increased growth and raised the standard of living in North America, binding the three countries in a complex web of trade rules and services.

But the new deal does change content rules on auto manufacturing, to boost US jobs, and requires higher salaries for some Mexican auto workers.

It also makes changes to e-commerce, intellectual property protections and dispute settlement for investors, as well as imposing tougher labour provisions, requiring reforms to Mexico's laws.

'Colossal victory'

Mexico ratified the new agreement December 10, and Canada is expected to follow suit in coming weeks.

For Trump, the "colossal victory" of USMCA fits neatly into his "America first" campaign message ahead of a difficult November reelection fight and his current battle to see off impeachment over alleged abuse of power and obstruction of congress.

"Two decades of politicians ran for office vowing to replace NAFTA... yet when selected they never even tried," he told government members, lawmakers, union representatives and selected workers assembled at the White House's South Portico.

'I keep my promises'

"I'm not like those other politicians – I guess in many ways," Trump said. "I keep my promises."

Under NAFTA, "we lost our jobs, we closed our factories and other countries built our cars. But we changed that," he said. "The USMCA closed these terrible loopholes."

US Trade Representative Robert Lighthizer, who led Washington's negotiations both with USMCA and the recent truce in an even higher-stakes trade battle with China, called it a "great, historic agreement."

NAFTA, he said, had been "highly controversial from the start" and many lawmakers subsequently "came to regret" their support.

And Trump's son-in-law Jared Kushner, who is a senior advisor, said the president was wrong-footing his many critics with USMCA, the China deal and the Mideast plan.

"He's brought a businessman's approach to Washington. He's a pragmatist," Kushner said on the FOX & Friends show, which provides mostly uncritical coverage of Trump's White House.

"The people in Washington may not like it that he's making them do work and he's making things happen that people have spoken about for many years before but couldn't deliver on," Kushner said.

Source: AFP