Trump announces agreement with Mexico on NAFTA overhaul
by admin ·
President Trump said Monday the U.S. has reached an agreement with Mexico amid contentious talks on revamping the North American Free Trade Agreement (NAFTA).
Trump declared the name “NAFTA” would be scrapped for an updated North American agreement, saying it has “bad connotations.”
“It’s a big day for trade. It’s a big day for our country,” the president told reporters in the Oval Office, who were summoned to watch Trump speak by phone with outgoing Mexican President Enrique Peña Nieto.
Trump cast doubt on whether Canada would be party to a new trade agreement, saying, “We’ll see if Canada can be part of deal.” He said the two nations would begin talking “relatively soon.”
The president said he plans to “terminate” the existing NAFTA agreement and move forward with the new emerging deal with Mexico.
If Canada is excluded, it would mark a major shift in U.S. trade policy, which has been guided by NAFTA for the past quarter century.
Trump would need Congress to approve the break-up of the three-nation agreement, a move that most on Capitol Hill would likely oppose.
Trump said he wants to call the new deal the “United States-Mexico Trade Agreement,” saying “I think’s it’s an elegant name.”
Peña Nieto told Trump that he looked forward to adding Canada to the deal.
Sitting in the Oval Office, U.S. Trade Representative Robert Lighthizer said if they could get a deal with Canada by the end of the week then he would notify Congress on Friday that an updated deal is complete.
That would start the 90-day clock in which the three nations would need to sign the new deal by the end of November.
The announcement marks the most significant development in the year-long talks on overhauling NAFTA, which Trump has called a “disaster” and repeatedly threatened to exit.
The U.S.-Mexico deal would require 75 percent of auto content to be made in U.S. and Mexico, up from 62.5 percent, USTR announced.
The deal also would require that 40-45 percent of auto content be made by workers earning at least $16 per hour.
But negotiators face a number of key hurdles before completing a deal.
Canada has not participated in NAFTA talks since July as the U.S. and Mexico worked through their differences. Canadian negotiators would need to sign off in order to complete a NAFTA overhaul involving all three countries.
Trump said Canada could become part of the three-nation deal if they negotiate “fairly.”
Canadian officials say they are eager to begin talks with the United States and those discussions are expected to start immediately.
The president said he would talk later on Monday with Canadian Prime Minister Justin Trudeau.
But Trump, who has been critical of Ottawa’s negotiating tactics and high tariffs on some U.S. goods, said he would punish Canada with car tariffs if they play hard ball on a final deal.
“With Canada, frankly, the easiest thing we could do is tariff their cars coming in,” Trump said.
“It’s a tremendous amount of money,” he said.
