United States and Mexico reach a preliminary trade deal

President Donald Trump

President Donald Trump

In the Oval Office on Monday, President Trump shook up the future of NAFTA when he announced he has reached a deal for a new U.S. -Mexico trade agreement.

Ford, GM, and Fiat Chrysler - the US's largest automakers - all got a boost Monday following the announcement that the USA and Mexico reached an agreement on parts of NAFTA.

The third NAFTA partner, Canada, has not been at the negotiating table for many weeks.

The Trump administration said the deal improves labour provisions.

Critics denounced the prospect of cutting Canada out a North American trade pact, in part because of the risks it could pose for companies involved in worldwide trade. It could also end up being little more than a public relations stunt by an administration desperate to secure a win after more than a year of failures on trade, according to analysts. Mexico has said they are going to start purchasing as much farm product as they can. "This doesn't seem like a well-thought-out plan that leads anywhere sensible".

The sides also agreed that 40-45 percent of cars must be made at "high wage" factories where workers receive $16 an hour in order to receive duty-free treatment, something that could deter off-shoring USA auto manufacturing to Mexico. The U.S. wouldn't vote on it until next year. We'll get rid of the name NAFTA.

USA and Mexican negotiators worked over the weekend to narrow their differences. Another is Congress, with key figures saying Monday that Canada - the top buyer of US exports - should be included.

Jimmy Carter, the 39th president of the United States, stressed the importance of the markets and worldwide trade to the American people, even as President Trump's use of tariffs has reduced - at least temporarily - global trade.

"We're very interested in building on this, making NAFTA a better, modernized agreement", Kerr said. "So if they had to compromise on energy, so be it".

Although Trump said he hoped Canada would join the new U.S. -Mexico agreement, he threatened Canada with new auto tariffs if it didn't "negotiate fairly".

Nonetheless, Kudlow said the administration is proud of the progress.

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Though the USA and Canada have traditionally enjoyed good trading relations, some 75 percent of Canada's exports are reportedly bound for the U.S. with only 15 percent of American exports destined for Canada.

Despite the administration's triumphant tone on Monday, there are numerous legal, legislative, and economic problems with the proposal. Revising NAFTA would need congressional approval, Burrell reported.

The preliminary deal may encourage more manufacturing in the U.S. Yet it's far from final.

The development puts Canada in the spotlight after its five-week summer vacation during bilateral talks between the other NAFTA partners. NAFTA by any other name is still free trade.

"There is so much work to be done to make it a three-way deal, and a three-way deal is critical", Wood said.

Trudeau spoke to Pena Nieto on Sunday (Aug 26) and shared their commitment to reaching a successful conclusion of Nafta "for all three parties" the prime minister's office said.

Another problem with the deal reached Monday, according to the Journal's editorial board, is that it strips protections from most USA investors in Mexico.

"There's a lot of documents and a lot of texts to dig into in terms of what has been worked on by Mexico and the United States", Trudeau said in Montreal-area Longueuil. Before the afternoon was out, Freeland was on her way to Washington in her capacity as minister responsible for the NAFTA renegotiation.

But Trump's claim was met with immediate pushback from the president of Mexico, who had been patched into the makeshift press conference by speakerphone. The window for a deal is "now, it's this week, so we'll see if Canada wants to come in and finish the deal", Maryscott Greenwood, chief executive officer of the Canadian American Business Council, told the network.

U.S. President Donald Trump hailed the agreement as "an incredible deal for the workers and for the citizens of both countries".

Mexico also agreed to eliminate dispute settlement panels for certain anti-dumping cases, a move that could complicate talks with Canada. Many key sectors, especially the automotive industry, have supply chains that snake across all three countries.

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