The U.S. capital markets were sent in the green on news that the United States and Canada reached an agreement to revamp the North American Free Trade Agreement, which will be called the United States-Mexico-Canada Agreement. Canada ETFs also gained as well as Mexico ETFs like the Direxion Daily MSCI Mexico Bull 3X ShsETF (NYSEArca: MEXX).
MEXX was up 2.45% as of 2:30 p.m. ET and up 9.2% within the past month.
“The modernization of the trade deal between Mexico, Canada and the United States concludes 13 months of negotiations and achieves what we proposed at the start: a win-win-win deal,” Pena Nieto said on a Twitter post.
MEXX seeks daily investment results equal to 300% of the daily performance of the MSCI Mexico IMI 25/50 Index. MEXX invests in securities of the index, which is designed to measure the performance of the large-, mid- and small-capitalization segments of the Mexican equity market, covering approximately 99% of the free float-adjusted market capitalization in Mexico.
U.S. President Donald Trump held a White House press conference following the announcement of the new deal, praising the newly dubbed “USMCA” agreement.
“We have negotiated this new agreement based on the principle of fairness and reciprocity,” said Trump. “To me, it’s the most important word in trade because we have been treated so unfairly by so many nations all over the world and we’re changing that.”
Good conversation with @RealDonaldTrump this morning – the new #USMCA is going to bring our countries even closer together and enhance competitiveness & prosperity, while creating new jobs for people across our continent: https://t.co/0B0O1r3W3t
— Justin Trudeau (@JustinTrudeau) October 1, 2018
Related: Dow Soars Over 250 Points on U.S.-Canada NAFTA Deal
With an initial trade deadline set for August 31 that extended beyond that date, both the U.S. and Canada were able to reach an agreement to supplant the current NAFTA agreement with the USMCA agreement. In late August, the U.S. struck a deal with Mexico to effectively eliminate the NAFTA name and create the United States-Mexico Trade agreement–a deal that would have gone forward without Canada if no agreement could be reached.
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 for approval.
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