A senior Trump administration official said the new United States-Mexico-Canada Agreement (USMCA) as a "great win for the president and a validation for his strategy in the area of global trade". On dairy the official said Canada essentially gave the US the same access it offered in the Trans Pacific Partnership trade agreement that President Donald Trump rejected.
The trade impasse was overcome after both parties made some concessions, with Canada agreeing to grant USA farmers greater access to its dairy market and limit its automotive exports to the US.
Dispute resolution: Chapter 19, an extrajudicial trade dispute system that allows NAFTA members to bring grievances against other members over allegedly unfair trade practices, will remain in place as it is under the current NAFTA.
One solution might be to imitate the provisions of the bilateral Mexico-U.S. deal on NAFTA.
"Lots of progress but we're not there yet ... we still have a couple of tough issues, so we're doing our best", Canada's ambassador to Washington, David MacNaughton, told reporters outside the Ottawa building where Canadian officials are gathered.
Negotiators reached a consensus before the deadline of midnight on Sunday, meaning the new agreement can be submitted to United States congress the required 60 days before being signed. There was no formal agreement on the US's existing steel and aluminum tariffs, according to a senior Trump administration official. He said he didn't know if a deal would be reached Sunday.
Daniel Ujczo, a trade attorney with the Dickinson Wright law firm who has followed the talks closely, said he expects the United States to get more access to the Canadian dairy market.
An agreement on how to treat the auto sector, reached this summer between the United States and Mexico, was central to a revamped NAFTA going ahead.
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Trade officials for the three countries have been at it for more than a year.
After months of sputtering talks, momentum picked up this weekend as Trudeau inserted himself and made clear that he wanted to get something done.
But concessions on dairy would be politically hard for Trudeau´s government, a matter complicated yet further by elections being held Monday in the key dairy producing province of Quebec.
It was essential for the parties to reach the deal, coveted by industries in both states, before midnight, so that it could be signed by outgoing Mexican President Enrique Pena Nieto on his last day in office, December 1. To placate Trump, Mexico agreed in August to provisions that would require 40 percent to 45 percent of a vehicle be built in countries where auto workers earn at least $16 an hour to qualify for NAFTA's duty-free benefits.
President Donald Trump reportedly accepted the new deal while Canadian Prime Minister Justin Trudeau held a late-night meeting with his Cabinet in Ottawa.
The almost 25-year-old NAFTA deal governs more than one-trillion us dollars in annual trade between the three countries.
Earlier this month, Trump went as far as saying he could cause the "ruination" of Canada if he applied a 20% tariff on Canadian automotive exports. And only vehicles that failed to meet the rules of origin for auto parts agreed to by the USA and Mexico would even potentially be subject to the proposed auto tariffs. Lawmakers have said they do not expect Congress to vote on the deal until early next year.
However, Canada has continued to impose high tariffs on dairy products as the country's politically powerful dairy farmers have resisted changes to the high tariffs that protect them from foreign competition.