US, Mexico reach trade "understanding", Trump threatens to cut out Canada

Dwayne Harmon
August 27, 2018

Donald Trump has announced a trade "understanding" with Mexico which could lead to an overhaul of the 24-year agreement between the two countries and Canada. Trump said he would talk to Canadian Prime Minister Justin Trudeau soon.

Mexican President Enrique Peña Nieto joined the group by phone for the announcement.

Canada has the most to lose if efforts to hammer out a new free-trade deal for all of North America are unsuccessful and the status quo is scrapped, according to a new report.

The U.S. and Mexico are hoping for a full deal with Canada by the end of the week, so current Mexican President Enrique Pena Nieto can sign it before he leaves office December 1. Trump says negotiations with Canada have yet to begin and is calling on the country to negotiate fairly.

The Mexico-U.S. discussions focused on crafting new rules for the automotive industry, which Trump has put at the heart of his drive to rework the pact he has repeatedly described as a "disaster" for American workers. Any new NAFTA would also have to get through the U.S. Congress, which sometimes takes years to approve trade deals made by a presidential administration.

Canada foreign minister Freeland expected to arrive for talks in Washington shortly - senior u.S.

Trade negotiations with Canada are still ongoing.

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Stocks are rising broadly as the USA and Mexico prepare to announce the details of the new trade agreement.

Canada's Foreign Affairs Minister Chrystia Freeland is now overseas on a diplomatic trip to Germany, Ukraine and France.

Lighthizer told Trump he expects the US-Mexico deal would be signed by the end of November.

"Mr. President, you've been my friend, and you have been somebody that's been very special in a lot of ways, we talked a lot, we talked a lot about this deal, and I'd like to congratulate you and the Mexican people", said President Trump to President Nieto. A month of talks followed, in August, but a new roadblock emerged: Mexico's outgoing administration had a different position on foreign access to the country's energy sector than the incoming one, which delayed an agreement to this week.

None of that stopped Trump from giving the impression on Monday morning that he was "terminating" NAFTA "and going into this deal" with Mexico.

Before the president's announcement, Lightizer and Mexican Secretary of Economy Idelfonso Guajardo walked together into the White House without talking to reporters. Trump's chief agricultural negotiator, Gregg Doud, said talks with Canada have been "really, really hard". They then would either agree to a new 16-year deal or the pact would expire. But as with many of Trump's declarations of victory, it's far from clear that this deal will be realized.

It's unclear if, and when, trilateral talks between Canada, the United States and Mexico would resume.

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