Published: Mon, August 27, 2018
Money | By Arnold Ball

'Really good deal' reached with Mexico on trade: Donald Trump

'Really good deal' reached with Mexico on trade: Donald Trump

During a phone call on Monday with Mexican President Enrique Peña Nieto, President Donald Trump said that if Canada could not agree to the deal, he would "like to call this deal the US and Mexico Trade Agreement", adding that NAFTA had a "lot of bad connotations".

But compared to the more dire possibilities-that Mr. Trump would pull the USA out of Nafta or, lacking congressional approval of that, impose high tariffs on Mexican and Canadian goods that would render the agreement obsolete-the possibility of renegotiation counts as a relief.

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.

Canada has the most to lose if efforts to hammer out a new free-trade deal for all of North America are unsuccessful and the status quo is scrapped, according to a new report.

The president made the announcement Monday in the Oval Office, with the Mexican president, Enrique Peña Nieto, joining by speakerphone. Trump also said the US would put tariffs on Canadian cars or reach a negotiated deal with them.

There is no formal free trade deal between the United States 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.

United States and Mexican negotiators are keen to seal a new deal before Mexican President Enrique Pena Nieto hands over power to president-elect Andres Manuel Lopez Obrador on December 1.

Canada foreign minister Freeland expected to arrive for talks in Washington shortly - senior u.S.

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Some experts interpreted the administration's signaling about a possible bilateral deal as an attempt to pressure Canada into a swift agreement on revising NAFTA, which the United States administration denied.

Canada's minister responsible for Nafta, Chrystia Freeland, is in Europe this week.

The US-Mexico deal would require 75 percent of auto content to be made in the NAFTA region, up from the current level of 62.5 percent, a second US official said.

The NAFTA talks have dragged on for a year. A new NAFTA would need to accepted and ratified by all three countries before it takes effect.

Jesus Seade, the NAFTA representative for Mexican president-elect Andres Manuel Lopez Obrador, has predicted that the nations will agree on a softened version of a so-called "sunset clause", an automatic expiration after five years - a key USA demand. He said he may include Canada in the Mexican deal.

Negotiatons with Canada and the United States, Trump said, will start immediately.

Advisers of incoming President Lopez Obrador hailed the new deal, saying it represented progress on energy and wages for Mexico's workers. He previously called it a "terrible deal".

On Monday morning, he tweeted that a deal would be coming today, and then later the administration set a time for that announcement.

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