The Dow Jones Industrial Average climbed by over 250 points on news that the United States and Canada reached an agreement on a revamped North American Free Trade Agreement, which will be called the United States-Mexico-Canada Agreement.
With an initial trade deadline set for August 31 that extended beyond that date, Canada’s top trade negotiator Chrystia Freeland said a deal has not yet been reached to revamp the NAFTA agreement between the U.S. and Canada. Earlier that same week, the U.S. struck a deal with Mexico to effectively eliminate the NAFTA name and create the United States-Mexico Trade agreement.
In addition to the Dow, the Nasdaq Composite a jumped over 40 points and the S&P 500 was up 20 points as of 11:00 a.m. ET.
“The market is happy because we’re removing an uncertainty,” said Maris Ogg, president at Tower Bridge Advisors. “It looks like this trade deal will benefit both countries, but I wouldn’t call it a great win for the Trump administration.”
The deal struck with all three nations would allow for more market access to U.S. dairy farmers with Canada capping automobile exports to the U.S.. The U.S., Mexico and now Canada are expected to sign the agreement by the end of November, which would then go to Congress.
Related: Trade Wars Do Not Concern Fed Chair Just Yet
Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico. The new name will be The United States Mexico Canada Agreement, or USMCA. It is a great deal for all three countries, solves the many……
— Donald J. Trump (@realDonaldTrump) October 1, 2018
….deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world. The USMCA is a historic transaction!
— Donald J. Trump (@realDonaldTrump) October 1, 2018
“As I’ve said many times, NAFTA has long needed a serious overhaul,” said Senate Finance Committee Ranking Member Sen. Ron Wyden, D-Ore. “The crucial test for a new NAFTA, or any new trade agreement, is whether it is enforceable, particularly with respect to promises to protect worker rights and the environment. Americans are sick of hearing speeches about the benefits of new trade agreements when the agreements in place aren’t even enforced and their opportunities don’t materialize.”
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