U.S., Mexico reach NAFTA deal as pressure turns to Canada




 

By Roberta Rampton and Jeff Mason

WASHINGTON (Reuters) - The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA), putting pressure on Canada to agree to the new terms on auto trade and other issues to remain part of the three-nation pact.

U.S. President Donald Trump and outgoing Mexican President Enrique Pena Nieto said talks with Canada would begin immediately, though Trump threatened he could put tariffs on Canadian-made cars if a three-way deal could not be reached.

"I think with Canada, frankly, the easiest we can do is to tariff their cars coming in. It's a tremendous amount of money and it's a very simple negotiation. It could end in one day and we take in a lot of money the following day," Trump said.

Negotiations between the three trade partners have dragged on for more than a year and repeated threats by Trump that he would ditch the 1994 accord have roiled financial markets, putting pressure on the Mexican peso and the Canadian dollar.

Officials said they hope Canada will agree to the terms by Friday, when the White House plans to formally notify Congress that Trump will sign the deal in 90 days. Congress has to approve it.

"There are still issues with Canada but I think they could be resolved very quickly," a senior trade official told Reuters in an interview.

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 negotiations with Canada to join the pact, U.S. Trade Representative Robert Lighthizer told reporters on Monday.

Some Republicans in the U.S. Congress called the deal a positive step but said Canada must be part of the new pact to avoid hurting U.S. jobs.

"Millions of jobs in Texas depend on an updated NAFTA, and it's important that we get this right," said Senator John Cornyn, the No. 2 Republican in the Senate.

Republican lawmaker Kevin Brady, chairman of the tax and trade-focused Ways and Means Committee, called on Canada to return to talks quickly "with the aim of concluding a modern, seamless three-way agreement."

Canada plans to continue to negotiate, but would only sign a new agreement that is good for the country, a spokesman for Canadian Foreign Minister Chrystia Freeland said. Trump said he would talk to Canadian Prime Minister Justin Trudeau soon.


NEW AUTO RULES

The United States, Mexico and Canada do more than 1 trillion dollars in trade between them every year. The announcement of a U.S.-Mexico agreement lifted financial markets.

Trudeau spoke to Pena Nieto on Sunday and shared their commitment to reaching a successful conclusion of NAFTA "for all three parties" the prime minister's office said.

The Trump administration said the deal improves labor provisions. The Mexico-U.S. discussions focused on crafting new rules for the automotive industry, which Trump has put at the heart of his drive to rework the pact he has repeatedly described as a "disaster" for American workers.

Matt Blunt, president of the American Automotive Policy Council, which represents General Motors Co <GM.N>, Ford Motor Co <F.N> and Fiat Chrysler Automobiles NV <FCHA.MI>, said the group was optimistic about the new deal, though it was still reviewing the details.

The 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 U.S. trade official said. A fact sheet describing the bilateral agreement specified the content would be made in the United States and Mexico.

The deal also would require 40 percent to 45 percent of auto content to be made by workers earning at least $16 per hour.

The United States and Mexico also agreed to a 16-year lifespan for the North American Free Trade agreement, with a review every six years that can extend the pact for 16 years, U.S. Trade Representative Lighthizer said.

The plan would not contain an automatic expiration for NAFTA as proposed in the prior U.S. demand for a "sunset clause." Mexico also agreed to eliminate dispute settlement panels for certain anti-dumping cases, a move that could complicate talks with Canada.

U.S., Mexican and Canadian stocks opened higher on Monday on optimism about a trade deal.

Mexican stocks <.MXX> jumped 1.4 percent to a seven-month high, while the peso <MXN=> firmed about 1.3 percent against the dollar, heading for its best one-day gain in more than a month.


(Reporting by Roberta Rampton and Jeff Mason; Additional reporting by Sharay Angulo, David Lawder, Dave Graham, Andrea Hopkins, David Shepardson; Editing by Chizu Nomiyama, Paul Simao, Grant McCool)

COMMENTS

More Related News

Trump launches 2020 bid with vow to
Trump launches 2020 bid with vow to 'keep America great'
  • World
  • 2019-06-19 02:53:11Z

President Donald Trump launched his 2020 reelection campaign Tuesday much the same way he rode to power in 2016 -- with a raucous, nationalist rally stirring fear of illegal immigration and vowing to fight for blue collar workers. Lashing out at his Democratic opponents as radical leftists fueled by

US restores some aid but vows no more without migrant action
US restores some aid but vows no more without migrant action

The Trump administration said Monday it is easing previously announced cuts in hundreds of millions of dollars in aid to the Central American nations of El Salvador, Honduras and Guatemala but will not allow new funding until those countries do more to reduce migrant flows to the United States. The State Department said that after a review of more than $600 million in assistance that President Donald Trump ordered in March to be cut entirely, it would go ahead with about $400 million in projects and grants that had been previously approved.

As promised, Trump slashes aid to Central America over migrants
As promised, Trump slashes aid to Central America over migrants

U.S. President Donald Trump's administration on Monday cut hundreds of millions of dollars in aid to El Salvador, Guatemala and Honduras, after Trump blasted the three countries because thousands of their citizens had sought asylum at the U.S. border with Mexico. The plan will likely encounter stiff opposition in Congress. Lawmakers, including some of Trump's fellow Republicans as well as Democrats, have chafed against the president's repeated decisions to disregard spending bills passed by Congress, some of which he has signed into law himself.

Pompeo tries rallying foreign leaders in alleged oil attacks
Pompeo tries rallying foreign leaders in alleged oil attacks

Secretary of State Mike Pompeo is reaching out to wary foreign leaders to frame alleged Iranian attacks in a Middle East oil shipping route as a problem for the world at large, especially for Asian countries vitally dependent on that oil. Pompeo, in a series of Sunday television interviews, emphasized the U.S. international outreach in the wake of what the U.S. says were Iranian attacks Thursday on two oil tankers near the Strait of Hormuz . The world needs to unite," Pompeo said.

Trump to Stephanopoulos:
Trump to Stephanopoulos: 'I Like the Truth,' I Didn't Sit for Mueller Interview Because He'd 'Get Us for Lies'

President Trump appeared to be obsessed with the Mueller report during his wide-ranging interview with ABC News' George Stephanopoulos, insisting that he read the special counsel's report while repeatedly claiming it says there was "no collusion" despite Robert Mueller stating specifically that no determination was reached on the concept of collusion.While speaking to Stephanopoulos in the back of the president's limousine, the president was asked what his pitch to swing voters "on the fence" would be, prompting Trump to quickly pivot to the Russia investigation, which he called a "phony witch hunt.""Mueller comes out-there's no collusion," the president declared. "And essentially a...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.