The trade deal is expected to provide security for USA companies that invest in Mexico’s energy sector, which outgoing President Enrique Peña Nieto opened up for foreign investment in 2013, ending 70 years of state monopoly.
Mr Trump has not yet begun negotiating with Canada, but has called on Prime Minister Justin Trudeau to lead negotiations “fairly”. “It could end in one day and we take in a lot of money the following day”, Trump said. He also threatened to tax Canadian auto imports to increase the pressure on Canada’s government.
“Mexico made a quantum shift from where they were thanks, I think, to their new president who argued that NAFTA was awful for Mexican workers who got the jobs but not the pay”, he said.
Canada said it was “encouraged by the continued optimism shown by our negotiation partners”, according to Adam Austen, spokesperson for Canadian Minister of Foreign Affairs Chrystia Freeland, who called progress between the USA and Mexico “necessary”.
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 Canada joining, Lighthizer told reporters on Monday.
Trump announced the agreement from the Oval Office Monday, with Mexican President Enrique Peña Nieto dialed in on a conference call.
Al Jazeera’s John Holman, reporting from Mexico City, said outgoing President Nieto “probably had to make sacrifices” to protect a trade agreement with the USA, with a possible effect being the flight of vehicle manufacturing companies from the country.
Industrial companies, banks and big technology stocks are among the biggest winners in midday trading on Wall Street.
Lighthizer told reporters in a call that the agreement with Mexico provided the “highest standards” of any existing agreement on digital trade, financial services and labor rights.
Traditional auto companies like Ford (+3.2pc) and General Motors (+4.9pc) saw their share prices surge.
More importantly, Trump is in no position to negotiate one or the other, since his fast track authority from Congress is for a trilateral renewal of NAFTA.
“Canada has still not been made privy to the deal but talks between the US and Canada is expected to start Tuesday (US time)”. He’s threatening anew to slap tariffs on Canadian cars if they fail to do what he wants. To make that happen, given the 90-day US notice requirement, signatures are needed on an agreement by the end of August – ie.
Videgaray said in Washington on Monday that scope for making changes with Canada to what the United States and Mexico had agreed was “significantly larger” this week, though he did not rule out alterations after that. Many manufacturers have built complex but vital supply chains that cross all three NAFTA borders.
And the No. 2 Senate Republican, John Cornyn of Texas, while hailing Monday’s news as a “positive step”, said Canada needs to be party to a final deal.
The Trump administration wants a higher percentage of auto production to come from within the NAFTA bloc before qualifying for duty-free status.
President Donald Trump made the announcement on Monday from the White House.
There is some urgency as the United States seems keen to have the issue resolved before the November midterm elections, and Pena Nieto wants to sign before handing the reins over to Lopez Obrador on December 1. Paap adds the USA needs to continue to work to bring Canada into the deal.
Trump emphasized that the term “NAFTA” was dead, eclipsed by the United States-Mexico Trade Agreement.
“NAFTA without Canada is a stool with two legs”, Davis said.
“The United States was hurt very badly by NAFTA for many years”, Trump said, adding that the pact with Mexico was “a really good deal”. The US trade representative’s office officially described the agreement as “a preliminary agreement in principle.to update the 24-year-old NAFTA with modern provisions representing a 21st century”.