China ‘threatened with isolation’ by veto written into US-Mexico-Canada trade deal

trade deal

LONDON: A special clause in the new US-Mexico-Canada trade agreement would give Washington a near-veto over any attempt by Canada or Mexico to agree to a free-trade deal with a “non-market economy”, in what analysts have said is a major threat to China’s position in the global trading system.

The United States-Mexico-Canada Agreement (USMCA), finalised on Sunday to replace the 24-year-old North America Free Trade Agreement, stipulates that any of the three parties to the deal has the right to be informed about any negotiations on a free-trade agreement with a “non-market economy” at an early stage, and can review any such deal signed by another member.

If one of the three were to sign a free-trade deal with a non-market country, either of the other two would have the right under article 32.10 to terminate the trilateral USMCA with six months’ notice and form its own bilateral deal on the same terms.—Agencies


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