4 takeaways from the U.S.-Mexico trade deal

4 takeaways from the U.S.-Mexico trade deal

Blasting the North American Free Trade Agreement between the United States, Canada and Mexico signed in 1994, President Donald Trump announced a new trade deal leaving out our neighbor to the north. Congress gave Mr Trump the authority to do only a trilateral deal, with both Canada and Mexico.

Prior to Trump's remarks, Canadian Foreign Minister Chrystia Freeland said through a spokesman that "Canada is encouraged by the continued optimism shown by our negotiating partners".

General Motors, the largest USA automaker by sales, jumped 4.8 percent in recent trading. Details of the U.S. -Mexico agreement were expected to be unveiled later Monday.

Canada is Virginia's biggest export market, and millions of American jobs depend on trade with Mexico and Canada.

Instead, the Mexican President Enrique Peña-Nieto, who joined Trump in the Oval Office by speakerphone, emphasized three times the importance of Canada joining the burgeoning agreement.

"Canada is [now] going to be presented with more of a take-it-or-leave-it offer", CIBC Economics analyst Avery Shenfeld said.

Mexican president Pena Nieto tweeted: "I spoke with Canadian Prime Minister Justin Trudeau on the state of the NAFTA negotiations and the progress made between Mexico and the United States. It has a bad connotation because the USA was hurt very badly by NAFTA".

Mr. Trump's announcement includes plans to wrap up negotiations between the U.S., Canada and Mexico by Saturday at the latest.

Wall Street traders sent the Nasdaq and S&P 500 indexes to record highs following a new trade agreement between the USA and Mexico.

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But the president hinted that all might not be smooth sailing from here, suggesting he could cut Ottawa out of the deal reached with Mexico and adding that he wanted to change the agreement's name.

"If these negotiations were an opera, we're at the end of the first act", Miller said. They will also be required to use more local steel, aluminum and auto parts, and have a certain proportion of the vehicle made by workers earning at least $16 an hour, a boon to both the United States and Canada.

The three North American countries do about one trillion dollars in trade among themselves annually.

Regardless of the roiling debate about USA trade law and negotiating tactics, Trump's imperiously dismissive tone about Canada today leaves little doubt the Washington-Ottawa relationship is badly frayed.

The deal included measures to boost the automotive industry in the US. He also threatened to tax Canadian auto imports to increase the pressure on Canada's government. They will now likely re-engage with Canada to reach a final deal on NAFTA, a primary goal of the Trump administration.

Trilateral trade between the three countries has exceeded $1tn annually in recent years, according to a 2017 report by the US' Congressional Research Service, with Canada and Mexico ranking in the top three largest buyers from, or suppliers to, the US in 2016. Two-way trade between the United States and Canada, at $673 billion a year ago, is larger than that between the United States and Mexico, which came to $616 billion.

Jerry Dias, national president of Unifor, tells BNN Bloomberg why the trade deal reached by the USA and Mexico is a good start for Canada's auto industry. "When I'm in Congress, I will fight for truly free and fair trade deals and not just let my party leadership do the talking".

"So whatever happens, it's affecting decisions now of companies in Canada", he said.

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