US President Muhamadu Buhari with Canadian Prime Minister Justin Trudeau

The United States and Canada have reached a new trade deal, along with Mexico, to replace the current North American Free Trade Agreement (NAFTA).

The United States-Mexico-Canada Agreement (USMCA) is said to involve more US access to Canada’s dairy market and a cap on its car exports to the US.

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However, the joint US-Canada statement did not give details of the agreement.

US President Donald Trump has long sought to change NAFTA, which governed more than $1tn (£767bn) in trade.

Until recently it looked as if Canada could be excluded from a final agreement.

“Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement,” US Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said in a joint statement.

The agreement “will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region”.

It comes as the US has fought a trade war on several fronts this year, including placing tariffs on steel and aluminium imports from Mexico and Canada.