Fitch: USMCA settles key trade uncertainties

Eren Sengezer FXStreet

"A deal between the Canadian, Mexican and U.S. governments for a revised trilateral free trade agreement should reduce key uncertainties for U.S.-Canada and U.S.-Mexico trade that have been in place since the U.S. announced its intention to renegotiate NAFTA," Fitch Ratings said in a recently published report.

Key takeaways

The agreement significantly reduces a key near-term macroeconomic risk for all three countries.
The agreement significantly reduces a key near-term macroeconomic risk The longer-term impact of the new agreement in terms of investment, jobs and growth, especially for Mexico, will depend on how supply chains in certain sectors, namely autos, respond to the new content requirements.or all three countries.
Fitch forecasts Canadian growth at 2.1% this year, but expects it to decelerate steadily in 2019 and 2020.
For the U.S., which is least exposed to NAFTA uncertainties, a combination of strong investment, labor market and consumer conditions continue to fuel robust domestic demand.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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