NAFTA is Out, a New Trade Deal With Mexico is Officially Here

NAFTA is Out, a New Trade Deal With Mexico is Officially Here

NAFTA is Out, a New Trade Deal With Mexico is Officially Here

Though a breakthrough between the USA and Mexico would leave complicated NAFTA issues involving Canada unresolved, it would increase the chances that the three countries will eventually reach a final accord to preserve a continental trade pact Trump had repeatedly threatened to terminate.

A deal between the United States and Mexico is only the start of a tough road to renegotiate the North American Free Trade Agreement.

He announced the progress from the Oval Office, with Mexican president Pena Nieto joining in on speakerphone. He noted, for example, that Trump said nothing Monday about dropping Trump's tariffs on Mexican or Canadian steel - tariffs that were imposed in part to pressure those countries to reach an agreement on NAFTA.

The negotiations are aimed at ironing out bilateral issues and then finalizing the new agreement with Canada, the third NAFTA partner. A month ago, representatives from both the USA and Mexico returned to the table after Mexico's elections forced a two-month hiatus on negotiations.

He added that he hoped Canada would be able to soon join the agreement.

The deal with Mexico involves the automobile industry, but does not include other areas of contention, The New York Times reported. A key element of the US-Mexico talks has been content requirements for autos, which Mexico reportedly agreed to increase to 75 percent from North America to get duty free NAFTA treatment.

Trump has repeatedly indicated he would prefer to reach bilateral agreements with Canada and Mexico, but the two countries have maintained a united front that a trilateral agreement is the only one they will sign. "It has a bad connotation because the United States was treated very, very badly for NAFTA".

Trilateral trade between the three countries has exceeded $1tn annually in recent years, according to a 2017 report by the US' Congressional Research Service, with Canada and Mexico ranking in the top three largest buyers from, or suppliers to, the US in 2016.

Under the tentative new NAFTA agreement, auto companies that want to benefit from the free trade bloc will have to make more of an automobile's total worth in one of the three countries.

Before the president's announcement, Lightizer and Mexican Secretary of Economy Idelfonso Guajardo walked together into the White House without talking to reporters.

None of that stopped Trump from giving the impression on Monday morning that he was "terminating" NAFTA "and going into this deal" with Mexico.

Adam Austen, who speaks for the foreign affairs minister, says Canada had been in regular contact with the NAFTA negotiators.

"To obtain an agreement with Trump, the government of Mexico turned its back on a friend nation, Canada", Mexican analyst and columnist Alejandro Hope said on Twitter. But Trump has called the agreement "the worst deal maybe ever signed" and moved ahead with tariffs earlier this year.

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