Trump announces trade pact with Mexico

Muriel Colon
August 28, 2018

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. Canadian leaders insist that they are in no hurry to renegotiate the pact or to agree to anything not in their favor.

Trump was joined via phone by Mexico's outgoing president, Enrique Peña Nieto, who was quick to say that Canada should be brought back into the negotiations.

"What has happened is not that the Americans or the Mexicans have chose to go faster between them, it's just that over the last few months, the Americans have arrived at the negotiating table with requests that specifically targeted Mexico, especially with respect to their proposals in the auto sector", Prof.

The White House said Trump will sign the deal in 90 days. The trade minister said South Korea was analizing the deal's impact on its auto industry. Or is all of this simply more of Trump's tough negotiating tactics aimed at wringing concessions from Canada?

John Cornyn of Texas, the No. 2 Senate Republican and chairman of the subcommittee on worldwide trade, said in a statement the Mexico agreement is a "positive step", but he added that Canada needs to be party to a final deal.

On automobiles: The new agreement would ensure that 75 percent of automobile manufacturing parts be made in the NAFTA region, up from the current 62.5 percent.

Trump and Pena Nieto have also agreed that 40 to 45 per cent of each auto manufactured must be build by workers earning more than $16 an hour. "We're not going to stand for that", he said. It'll either be a tariff on cars or it'll be a negotiated deal.

"It is hard to extrapolate much out of it, as the USA continues to treat each country and deal on its own merit".

Workers at a General Motors plant in the city of Silao, in the state of Guanajuato, Mexico.

The administration didn't go into specifics, but said the proposed United States-Mexico Trade Agreement is a "mutually beneficial win for North American farmers, ranchers, workers and businesses".

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

Hatch recalled that Canada is the top export market for 36 of the US's 50 states (the top export market for several of the remaining states is Mexico, particularly those on the US's southwest border). It does add pressure on Canada to reenter the talks if the 1994 agreement is to be overhauled.

US President Donald Trump's economic adviser, Larry Kudlow, said Monday's revised NAFTA deal with Mexico should serve as a "reset" for talks with Canada.

Canada, which is part of NAFTA, is not participating in the announcement. US goods and services trade with Canada totaled an estimated $544.9 billion in 2016, with a trade surplus of $11.2 billion. Sitting in the Oval Office, U.S. Trade Representative Robert Lighthizer to ask when the deal would be signed.

The deal must be reviewed by Congress and can not be finalized until at least November.

Instead, senior U.S. officials told reporters the agreement had been extended for 16 years but would be reviewed every six years.

"While the Iranian sanctions issue certainly isn't new news, suggestions out of the White House that waivers will be restricted appeared to augment last week's price gains", said Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. "They know the issues, we talked about all these issues" during previous rounds of talks.

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.

Other reports by

Discuss This Article