US And Mexico Reach Trade Deal To Replace NAFTA

US And Mexico Reach Trade Deal To Replace NAFTA

US And Mexico Reach Trade Deal To Replace NAFTA

According to some media reports, the deal would require 75 per cent of auto content would be made in the United States and Mexico, up from the current level of 62.5 per cent As well, 40 to 45 per cent of that auto content would have to be made by workers earning at least $16 per hour.

The agreement tried to offset incentives to move production further offshore by requiring that 75 percent of vehicle contents have to be made in the United States, Mexico, or Canada-though Canada has yet to agree to terms with the United States on trade and negotiations remain ongoing.

Adam Austen, who speaks for the foreign affairs minister, says Canada had been in regular contact with the NAFTA negotiators. President Donald Trump says the prospects are "looking good" for an agreement with Mexico that could set the stage for an overhaul of the North American Free Trade Agreement.

Al Jazeera's Kimberly Halkett, reporting from Washington, DC, said Trump was "delivering" on promises made during his successful presidential campaign to renegotiate major trade deals affecting U.S. workers. He threatened tariffs on autos imported from Canada as another way to keep up pressure.

The US-Mexico discussions focused on crafting new rules for the automotive industry - which Mr Trump has put at the heart of his drive to rework trade pact (which he has repeatedly called a "disaster") for American workers.

"But one way or the other, we have a deal with Canada". He then congratulated him on the new deal with the cameras rolling.

Analysts said it won't be easy to simply shut the door on the Canadians.

In a move which would be unusual for most USA leaders, Mr Trump chose to have his phone call congratulating Enrique Pena Nieto recorded live.

"If they want Canada to ditch [dairy] supply management, I don't see how the Liberals could sell that to Canadians in an election year", he said.

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Trump has rejected other multi-national deals, such as the Trans-Pacific Partnership (another trade pact) and the Paris Agreement on climate change mitigation, expressing a strong preference for one-on-one negotiations on trade and other matters with countries. "He has not got any approval to negotiate a bilateral deal with Mexico", Herman said.

University of Laval professor Louis Belanger agreed, explaining that the US-Mexico issues were obstacles to reaching an accord and needed to be resolved separately before trilateral negotiations could continue. "That provision will not exist", he said Monday, but it was historically a dealbreaker for Canada.

Another problem with the deal reached Monday, according to the Journal's editorial board, is that it strips protections from most US investors in Mexico.

President Donald Trump made the announcement from the Oval Office.

If talks with Canada are not wrapped up by the end of this week, Trump plans to notify Congress that he has reached a deal with Mexico, but would be open to Canada joining, US Trade Representative Robert Lighthizer told reporters. Trump administration officials said it includes updated terms on contentious areas such as auto manufacturing, dispute settlements, and labor protections.

President Trump said negotiations to bring Canada into the new deal should start soon. "It is outrageous that the United States and Mexico would negotiate some kind of arrangement behind closed doors".

The new deal will affect farmers, although the president hasn't released specific details on the agriculture changes.

Auto prices are expected to rise in the United States, with higher demand for used cars, after the tentative trade agreement with Mexico.

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