The Daily Update - New NAFTA / Blinkered Italians

Late last night, the United States, Mexico and Canada reached a new tri-lateral trade agreement that will replace the North American Free Trade Agreement (NAFTA) it was announced. Talks on the new deal have been ongoing for more than a year to replace the 24-year-old NAFTA agreement, which Trump famously called ‘the worst deal ever’. The new pact, which is being called the U.S.-Mexico-Canada Agreement (USMCA), will come up for review in six years, which, according to a senior American official, will give the US a ‘significant new form of leverage’ to make sure the agreement continues to be to the US’ liking. Then if it is still to the US’ ‘liking’ it could then be extended for another 16 years. The new deal will be signed after passing through Congress for approval, which it has 60 days to do so.

In a joint statement Canadian Foreign Affairs Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer said ‘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)’ adding ‘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’, finishing off with ‘It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home’ So the same as NAFTA did then?

Also over the weekend there were various hopes and warnings on Italy’s budget announcement last week. In one corner you had Giovanni Tria, Italy’s Economy Minister, saying that investments will fuel Italian economic growth over the next two years and the debt level will be put on a downward path despite a significant increase in the budget deficit. Whilst in the other corner you had Ignazio Visco, the Bank of Italy Governor telling journalists that debt must be ‘put on a downward path’.

Not that these warnings seemed to bother the coalition partners, with the leader of the League, Matteo Salvini saying in a statement ‘Be calm Mr. President, years of budgets imposed by Europe have made our public debt explode, finally we are changing course and betting on the future and on growth’. Along with that statement we had 5-Star leader Luigi Di Maio saying the budget would ‘repay the people for the thieving of the past’.

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