United States trade deal with Mexico smashes NAFTA & puts squeeze on Canada

United States trade deal with Mexico smashes NAFTA & puts squeeze on Canada

After months of intense negotiations, the United States and Mexico announced an agreement Monday on a thorough overhaul of the 25-year-old free trade pact, but President Donald Trump suggested he could cut Ottawa out.

Donald Trump has said that he could go ahead without Ottawa in the new agreement.

Larry Kudlow, the director of the president's National Economic Council, and Commerce Secretary Wilbur Ross, said in separate interviews today that concessions from Canada on dairy are essential to getting a deal by Friday.

Canada, Mexico and the United States implemented the North American Free Trade Agreement, known as NAFTA, in 1994.

There is no formal free trade deal between the United States and Mexico, only an agreement between the two countries on how to resolve key issues in their trade relationship as part of the NAFTA talks. Mexican President Enrique Peña Nieto immediately pushed back on comments excluding Canada, which was set to begin high-level meetings with the Trump administration in Washington a day later.

Canada has sat out the talks between the USA and Mexico. That percentage will be increased to 75% from 62.5%. His sentiments were echoed by Vice President Mike Pence who said "The U.S. -Mexico Trade Agreement is a win for American ranchers, manufacturers and auto workers".

Trump's promise to build a border wall funded by Mexico has always been a source of friction between the two countries.

"I talked to the President @realDonaldTrump".

The trilateral treaty has been a key target in Trump's aggressive trade strategy and he has repeatedly threatened to scrap it altogether, branding it a "disaster".

For that to happen, US Congress must be notified 90 days in advance, which means the administration must send the notice by the end of the week.

We are in regular contact with our negotiating partners, and we will continue to work toward a modernized NAFTA.

The US President's promise to make Mexico pay billions of dollars for a wall to stop illegal immigration hasn't been a part of recent conversations between the nations as they worked to update Nafta, he said.

Mexico and Canada have so far backed each other in ensuring a replacement trade deal is trilateral.

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

"I think we're at a position where we're going to have discussions with Canada this week and see where we get to", the official said, referring reporters to Mexico to describe their position. The government says the changes will "incentivize billions a year in vehicle and automobile parts production in the United States, supporting high-wage jobs".

Canadian Foreign Minister Chrystia Freeland gestures during a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico, March 5, 2018.

Jimmy Carter, the 39th president of the United States, stressed the importance of the markets and worldwide trade to the American people, even as President Trump's use of tariffs has reduced - at least temporarily - global trade.

However, his transition team has been taking part in the talks, and gave their blessing to the two-way deal.

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