Trump announces trade deal with Mexico, Canada on sidelines

Trump announces trade deal with Mexico, Canada on sidelines

When asked by reporters if a deal had been reached, Mexican Economy Minister Ildefonso Guajardo said an announcement was "probably on the agenda", but that he still had to conclude a "very important" issue.

Trump said Monday during an Oval Office event that he'll be calling the emerging agreement the "United States-Mexico Trade Agreement" - a name that would exclude the third NAFTA partner, Canada. It'll either be a tariff on cars or it'll be a negotiated deal.

Adam Austen, who speaks for the foreign affairs minister, says Canada had been in regular contact with the NAFTA negotiators.

The United States, Mexico and Canada do more than 1 trillion dollars (£775.8 billion) in trade between them every year.

"But I think we'll give them a chance to probably have a separate deal".

Under Monday's preliminary agreement, Mexico agreed to ensure that 75 percent of automotive content be produced within Mexico and the US, up from the current 62.5 percent, according to the Office of the US Trade Representative.

Mexico's case provides an example: When the talks first began a year ago, negotiators sought to reach a deal by the end of 2018, so the nation's Congress could approve a deal before elections took place.

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One of the most fundamental parts of Trump's campaign for president was his promise to change America's deeply flawed trade arrangements.

The US and Mexico reached a tentative deal to revise parts of NAFTA, and the White House was expected to announce the news later Monday morning.

Trump said the NAFTA name will be discarded, citing a "bad connotation". "Mexico has promised to immediately start purchasing as much farm product as they can".

Behind the scenes, though, the Trump administration is attempting to get Canada to sign off on a trilateral deal, and Trump's words could be viewed as a threat for Canada to get onboard as quickly as possible. Canada, so far, has been excluded from the talks as Mexico and the USA resolve their issues.

The two countries have agreed that 75 percent of a product must be made in the USA and Mexico to receive tax-free treatment, which is more than in the existing deal, the U.S. said. But as with many of Trump's declarations of victory, it's far from clear that this deal will be realized.

Republicans in Congress, who are typically supporters of free trade, have pressed the White House to strike a deal, arguing that the relationship has benefited U.S. farmers and other groups.

Talks between the USA and Mexico had focused largely on cars. It would also require 40 percent to 45 percent of auto content to be made by workers earning at least $16 per hour, a second official said.

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