Published: Tue, August 28, 2018
Money | By Arnold Ball

U.S. and Mexico reach a preliminary trade deal that could replace NAFTA

U.S. and Mexico reach a preliminary trade deal that could replace NAFTA

Negotiations with Canada were set to commence "immediately", Trump said. Trump realized the power this gives us and chose to use it to level the playing field for American workers-unlike other recent presidents. That requirement would deter United States auto manufacturers from moving production to Mexico, where labor costs are lower, something central to Trump's attacks on NAFTA. Meanwhile, Mexico's president made clear Monday he wants Canada to be part of the updated agreement.

Does anyone understand what the President is doing with NAFTA? But the countries still must resolve hard issues, including USA complaints about Canada's protection for its dairy farmers and the way disputes are resolved under NAFTA.

The president's own staff then also undercut the message.

US Trade Representative Robert Lighthizer said the agreement was "absolutely terrific" and would modernize a trade deal that had "gotten seriously out of whack". Lighthizer noted that any signing would be delayed until Congress was informed and a 90-day waiting period passed.

Rep. Ron Estes, a Republican seeking re-election in the 4th District, called the prospects of a new deal "great news" that signals a breakthrough in negotiations.

"This (Trump) administration has shown an awesome lack of both diplomacy and consistency in its dealings with our friends, neighbors and allies, and I don't see that changing", Garza said. "It depends on what the timetable is with Congress". Monday mostly "showcased a strategy where Trump bluffs, rebrands, and claims victory".

The preliminary agreement with Mexico includes an option to renegotiate in six years and extend for an additional 16 years.

The first tipoff was the theatrics, which were rushed even by Trump's looser standards.

Trump announced the deal from the White House on Monday, calling it a "big day for trade".

David Luiz admits he would have left if Antonio Conte had stayed
But when he has a team like Napoli that was doing well, he was playing well and he was close, he was close. Benitez said: "Everybody knows that finishing 10th was a miracle because we did really well, that's it".

The second is the timing. Even if more plants are built in Mexico, jobs will grow in the United States due to high levels of integration, with studies showing that US parts make up 40 percent of the value of every Mexican-built vehicle exported to the United States. But a senior Administration official insisted that wasn't the case on a conference call with journalists.

Ethan Corson, executive director of the Kansas Democratic Party, said the announcement puts the cart before the horse. "This is a normal, orderly way to arrive at an agreement with three people". López Obrador would likely seek some changes to the deal.

A final deal would need sign-off from Canada, the third country in the treaty, which governs more than $US1 trillion ($NZ1.49t) in annual trade.

Trump was joined via phone by Mexico's outgoing president, Enrique Peña Nieto, who was quick to say that Canada should be brought back into the negotiations.

"I believe this should stop the bleeding in Canada".

Canada said it is "encouraged". The Trump administration is also seeking a sunset clause that would end the pact after five years, unless the three countries explicitly agree to continue it.

The upbeat trade outlook was further boosted by news that Washington was pressuring the European Union to accelerate tariff talks.

But Canada is likely to object to revisions in Nafta that include rules that will make it harder for treaty members to challenge USA trade penalties.

With a tentative bilateral trade deal in their pockets, both American and Mexican officials have their sights set north of the US border with hopes of negotiating new trade deals with Canada.

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