US, Mexico Reach NAFTA Deal and Put Pressure on Canada


Mr. Trump said the new deal was better for the U.S. and rendered obsolete the 24-year old agreement between the U.S., Mexico and Canada.

"It's not the right time to talk, but eventually I'm sure we'll be able to work out a deal with China, but in the meantime we're doing very well with China, ' Trump said Monday".

The U.S. and Mexico are close to resolving their NAFTA differences and may wrap up as soon as Monday, creating an opening for Canada to rejoin talks between countries that trade more than a trillion dollars annually.

And there are political reasons to keep Canada inside the regional bloc: "Mexico will have a hard time selling "Trump's deal" back home if Canada does not think it is a good deal", said Daniel Ujczo, a trade attorney with Dickinson Wright PLLC.

President Trump announced a trade "understanding" with Mexico Monday that could lead to an overhaul of the North American Free Trade Agreement.

The US trade representative, Robert Lighthizer, and the Mexican secretary of economy, Ildefonso Guajardo, walked together into the White House without talking to reporters on Monday.

Canadian Foreign Affairs Minister Chrystia Freeland is due to arrive in Washington D.C. Tuesday, and described the news as "encouraging" in a statement.

But some industry groups said they wanted more clarity on final terms before celebrating the deal.

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Lighthizer told Trump he expects the US-Mexico deal would be signed by the end of November. The new preliminary agreement would increase that requirement.

The plan would not contain an automatic expiration for NAFTA as proposed in the prior US demand for a "sunset clause". But the countries still must resolve hard issues, including US complaints about Canada's protection for its dairy farmers and the way disputes are resolved under NAFTA.

Trump says he will be calling Prime Minister Justin Trudeau.

Trump says the details are still being finalized but noted the deal is good for trade, jobs and farmers.

Stocks are rising broadly as the USA and Mexico prepare to announce the details of the new trade agreement. He previously called it a "terrible deal". Mexico also agreed to eliminate dispute settlement panels for certain anti-dumping cases, a move that could complicate talks with Canada. He said the trade deal between Mexico and the United States "was the largest trade deal ever made".

There is no formal free trade deal between the U.S. and Mexico, only an agreement between the two countries on how to resolve key issues in their trade relationship as part of the NAFTA talks.

Mexico and Canada have stood firm on the importance of maintaining the trilateral format of the NAFTA free trade deal, even as Trump has signaled a desire for individual deals with each country.

Trump understood the simple math that countries with which we have trade deficits would have to come to the negotiating table.
A new NAFTA would need to accepted and ratified by all three countries before it takes effect.