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U.S., Mexico Reach Trade 'Understanding' That Could Lead To NAFTA Overhaul

28 August, 2018, 18:41 | Author: Shawna Walton
  • U.S., Mexico reach NAFTA deal; talks with Canada to start immediately - Autoblog

The United States and Mexico agreed on Monday to a sweeping trade deal that pressures Canada to accept new terms on autos trade, dispute settlement and agriculture to keep the trilateral North American Free Trade Agreement (NAFTA).

Trump understood the simple math that countries with which we have trade deficits would have to come to the negotiating table.

U.S. Treasury Secretary Steve Mnuchin said he believed the United States can reach a trade deal with Canada this week after coming to an agreement with Mexico.

Donald Trump's attempts to get the Mexican president on speakerphone to celebrate a new trade deal descended into farce thanks to technical glitches. "It has a bad connotation, because the United States was hurt very bad by NAFTA", Trump said.

Duty-free access to farm products will also stay in the deal, and Mexico agreed to immediately start buying as many USA farm products as possible.

The president said he is willing to call Canadian Prime Minister Justin Trudeau, adding, "If they'd like to negotiate fairly, we'll do that".

President Trump spoke to reporters from the Oval Office, with the Mexican president on the phone. "It could end in one day and we take in a lot of money the following day", Trump said.

According to Trump, the new, as-yet-unratified deal is set to replace the current North American Free Trade Agreement (NAFTA).

Trump finalized negotiations Monday following talks Sunday led by Trump's son-in-law and White House adviser Jared Kushner, along with US Trade Representative Robert Lighthizer.

Observers have raised concerns that Canada's absence from the talks could put Ottawa in a position where it might be pressured into accepting a less-appetizing deal reached between the USA and Mexico.

Trump also cast doubt Monday on whether Canada would be included in a renegotiated deal.

Prof. Leblond said it would be political suicide for Trudeau's Liberal administration, with one year before a general election, to give in to US demands for significantly greater access to Canada's protected dairy market.

But Trump was eager to portray the agreement as much more than that as the reality TV star-turned-president orchestrated the latest made-for-TV moment of his presidency.

President Trump added, the move will be an "incredible deal" for both countries, especially for the manufacturing and farming industries.

"I think it's an elegant name", Trump said at an event Monday at the White House. Trump threatened he still could put tariffs on Canadian-made cars if Canada did not join its neighbors and warned he expected concessions on Canada's dairy protections.

"We will only sign a new NAFTA that is good for Canada and good for the middle class", said Adam Austen, a spokesperson for Freeland, saying "Canada's signature is required". US trade officials described the agreements reached over the weekend with Mexico as a big improvement over the current free trade pact between the three countries.

The Trump administration said the deal improves labor provisions, in part by requiring 40 percent to 45 percent of auto content to be made by workers earning at least $16 per hour.

Most Mexican auto exports are in a position to comply with the new limits, the country's economy minister said.

"Unsurprisingly, the Mexican peso gained as did the Canadian dollar too to be fair, and even the euro strengthened as it perhaps signals greater odds of a trade breakthrough between the U.S. and European Union (although a stronger IFO probably helped too)".

Many hurdles remain, including the fact that any final deal would need to be ratified by Congress.

Peña Nieto said several times Monday that he hoped Canada could be incorporated in the deal.

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