President Trump Announces Renaming, Overhaul to NAFTA in 'Fairer' Deal with Mexico

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

U.S. stock indexes hit fresh records Monday as the United States and Mexico struck a tentative a bilateral trade deal that's expected to replace the 24-year old North American Free Trade Agreement. During a last-minute meeting at the Oval Office, President Trump spoke to Peña Nieto by phone.

U.S. President Donald Trump hailed the agreement as "an incredible deal for the workers and for the citizens of both countries".

"(It) is definitely good news for Mexico and the U.S., but could be good or very bad for Canada", Capital Economics Chief U.S. Economist Paul Ashworth wrote in a note to clients on Monday afternoon. 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".

Ford, GM, and Fiat Chrysler - the US's largest automakers - all got a boost Monday following the announcement that the U.S. and Mexico reached an agreement on parts of NAFTA.

In Mexico City, former U.S. Ambassador Tony Garza and counsel at White & Case, said the deal "appears to be a significant step, but I wouldn't be popping any corks, or not yet anyway.Let's not get ahead of ourselves".

Much of the business world has been anxious about Trump's trade policies, and the stock market reacted positively to the news of a deal.

Potential hold-ups to Canadian agreement to the news terms include compromises on agriculture.

But ex-reality star Trump was left scrabbling for help when the call failed to connect, saying: 'Enrique?,' only to get no response.




Noticeably absent from the agreement was Canada, one of America's top trading partners. (A de minimis shipment value is the threshold at which a business has to pay duties on goods moving across the border and are subject to more stringent security checks.) Small US businesses or persons shipping goods worth $100 or less to Mexico would not be subject to tariffs and would face simpler customs checks. "The leaders welcomed the progress that has been made in discussions with Mexico and look forward to having their teams engage this week with a view to a successful conclusion of negotiations", Trudeau's office said in a statement. "Canada will have a lot of hard decisions to make in deciding whether it wants to go along with these changes, or whether it should try to push back", Lester said.

In addition, 40 to 45 percent of the parts of cars sold must be made by employees making at least $16 per hour. Mexico has said they are going to start purchasing as much farm product as they can.

"If Canada does not join, then getting the agreement of (U.S.) Congress (to the deal) will be trickier", Donovan said. "I hope it has been worth it, a maneuver that, to put it politely, does not do us honor".

Senior administration officials told reporters that the goal is to send a formal notification of the renegotiation to Congress on Friday, kicking off the clock for lawmakers to support or reject the new deal.

Canadian Foreign Minister Chrystia Freeland will travel to Washington, D.C., on Tuesday for negotiations.

The Trump administration will now work in partnership with Mexico to bring Canada to the table for a new and potentially separate deal.

Under the current law, about 62% of the parts in any vehicle sold in North America must be produced in the region or automakers have to pay import taxes.

But Trump's claim was met with immediate pushback from the president of Mexico, who had been patched into the makeshift press conference by speakerphone.

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