President Trump Announces the United States-Mexico Trade Agreement
The Trump Administration and Mexico have reached a preliminary accord to end the North American Free Trade Agreement (NAFTA) and replace it with a deal that the administration says is more favorable to the United States.
US President Donald Trump, in announcing the tentative agreement Monday at the White House, said a new deal would be called “the United States-Mexico Trade Agreement.
President Trump has frequently condemned the 24-year-old NAFTA trade pact as a job-killing “disaster” for the United States.
The new agreement is not final.
The Trump Administration still needs to negotiate with the 3rd partner in NAFTA, Canada, to become part of any new trade accord. Without Canada, America’s #2 trading partner, it is still unclear whether any new US trade agreement with Mexico would be possible.
The President said that he will be calling Canadian Prime Minister Justin Trudeau.
“If they’d like to negotiate fairly, we’ll do that,” President Trump said.
NAFTA reduced most trade barriers between the 3 countries. But President Trump and other critics say it encouraged US manufacturers to move south of the border to exploit low-wage Mexican labor.
US and Mexican negotiators worked over the weekend to narrow their differences.
The Office of the US Trade Representative said Monday that Mexico had agreed to ensure that 75% of automotive content be produced within the trade bloc that is up from a current 62.5% to receive duty-free benefits and that 40 to 45% be made by workers earning at least $16 an hour.
The Big Q: Where does Monday’s announcement leaves Canada?
A spokesman for Canadian Foreign Minister Chrystia Freeland, said: “Canada is encouraged by the continued optimism shown by our negotiating partners. Progress between Mexico and the United States is a necessary requirement for any renewed NAFTA agreement.”
The Canadians had been regular contact with the NAFTA negotiators.
“We will only sign a new NAFTA that is good for Canada and good for the middle class,” he said, adding that “Canada’s signature is required.”
The #2 Senate Republican, John Cornyn (TX), hailed the “positive step” but said Canada needs to be party to a final deal. “A tri-lateral agreement is the best path forward,” he said, adding that millions of jobs are at stake.
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