Bloomberg: Nafta’s China Clause

After much fanfare about scrapping the North America Free Trade Agreement, US President Donald Trump reached a new deal with neighbors called the US-Mexico-Canada Agreement. A new clause stipulates that if members of the North American pact reach a trade deal with a non-market economy then they would be ineligible for some USMCA benefits. Given Trump’s fiery rhetoric about launching a trade war with China, this clause is expected to be an obstacle for Canadian Prime Minister Justin Trudeau’s ambition to obtain a free-trade deal with Beijing, Josh Wingrove of Bloomberg News reports, especially with Trudeau’s efforts to build relationship with Chinese leadership fizzled out last year. The new clause also raised eyebrows from the intended target – China – with the embassy in Ottawa putting out a statement decrying USMCA’s double standard for non-market economies. While many countries do recognize China as a market economy, the United States and the European Union have balked at doing so. – YaleGlobal