New Trump-Mexico trade deal ‘worse in many ways’ than NAFTA

New Trump-Mexico trade deal ‘worse in many ways’ than NAFTA

Shares of Canadian auto-parts manufacturers rallied on Monday even as U.S. President Donald Trump threatened he could put tariffs on Canadian-made cars if a three-way deal could not be reached.

"I like to call this the United States-Mexico Trade Agreement".

Mexican President Enrique Pena Nieto said he spoke to Canadian Prime Minister Justin Trudeau and emphasized to him "the importance of his reinstatement in the process in order to conclude a trilateral negotiation".

"Trade Representative Robert Lighthizer appears to have weakened US demands that the new deal should include an automatic five-year break clause, under which the agreement would need to be explicitly renewed by the legislative bodies in each of the three countries", Ashworth said.

The Journal then pronounced sentence on Trump's deal by concluding: "The deal announced Monday has moving parts and there is still time to make improvements before it is signed and sent to Congress".

He estimated that the new deal would require Canada to sign on to deconstructing NAFTA and replacing it with a new bilateral or trilateral trade framework.

The Canadian dollar strengthened to a almost three-month high against its US counterpart on Tuesday on the prospect of Canada reaching a deal this week to overhaul NAFTA. Trump and Republicans in the US Congress up for re-election in November want to ensure farmers and other voters whose jobs depend on trade with Canada and Mexico that the deal is sealed.

Disputes on trade have dragged on investor sentiment for much of 2018, despite solid economic fundamentals and robust corporate earnings. But hard work remains for developing a revamped NAFTA agreement. Both U.S. and Mexican officials said Monday they are now focused on Canada. But as the Oval Office pushback showed, there are more reasons than usual to be skeptical of Trump's sales pitch on the new free trade agreement.

More broadly, the deal vindicates Trump's approach to trade, which has been lambasted by voices ranging from Wall Street to the national security establishment to the Chamber of Commerce, as well as mavens from both political parties.

Noticeably absent from the agreement was Canada, one of America's top trading partners.

"A lot of people are viewing this as a negative but I don't see that at all", he told AFP. "I think it's an elegant name", Trump said at one point, and said the USA may, "just do a separate deal with Canada, if they want to make the deal".

Trump has presented this as a bilateral deal and threatened Canada with vehicle tariffs. It also mandates 40 percent to 45 percent of content will be made by workers earning at least $16 an hour.

If ratified, the "preliminary agreement with Mexico", as the White House termed it Monday, would update the NAFTA rules governing trade between the two countries.

Lopez Obrador, a leftist free-trade skeptic who won a landslide election victory on July 1, said he considered it a good deal for Mexico.

"Canada handled that threat with prudent restraint, praising the U.S. -Mexico "progress" and offering to rejoin trilateral talks this week", the editorial praised.

Stock markets worldwide rose to a six-month high on Tuesday as fears of a global trade war receded after Donald Trump announced a US-Mexico trade deal.

Meanwhile, Canadian Foreign Minister Chrystia Freeland rushed back from a European tour to talk trade in Washington with US Trade Representative Robert Lighthizer. It also requires that 75 percent of the parts of cars sold in North America be produced in the United States or Mexico.

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