Published: Mon, August 27, 2018
Money | By Bruce West

President Trump terminating NAFTA, pursuing separate deal with Mexico

President Trump terminating NAFTA, pursuing separate deal with Mexico

Joined on the phone by Mexican President Enrique Peña Nieto, President Trump announces the United States-Mexico Trade Agreement, an understanding with Mexico that could lead to overhaul of NAFTA.

Trump said he planned to call Trudeau "very soon".

At the same time, President Donald Trump threatened to keep Canada, the third member of NAFTA, out of any new trade agreement.

U.S. President Donald Trump talks via speakerphone to Mexican President Enrique Pena Nieto to announce a deal to replace the North American Free Trade Agreement (NAFTA) at the White House in Washington, U.S., August 27, 2018.

Trump said the NAFTA name will be discarded, citing a "bad connotation".

He then threatened Canada with new tariffs on cars if it didn't come to a trade agreement with with the USA, which he said could be bilateral.

Canada and Mexico oppose several US demands, like a five-year sunset clause.

U.S. Secretary Sonny Perdue is expected to release details of a US$12 billion aid package for the country's agriculture sector on Monday to help counter the negative effects of an ongoing trade war between Washington and Beijing that's resulted in stiff retaliatory tariffs against a number of American agricultural products.

Trudeau spoke to Pena Nieto on Sunday and shared their commitment to reaching a successful conclusion of NAFTA "for all three parties" the prime minister's office said. But Mexico resisted a US demand that a per centage of the content of cars and trucks come from factories where workers are paid at least USA $16 an hour - a ploy to push factory jobs away from Mexico, where workers made just $4, and to the U.S.

After the election, the new president-elect's team met with US representatives and joined the negotiations as a sign of goodwill.

Mr Trump has been critical of NAFTA, signed in 1994, which he blamed for sending United States manufacturing jobs to Mexico.

Adam Austen, who speaks for the foreign affairs minister, says Canada had been in regular contact with the NAFTA negotiators.

Jesus Seade, the NAFTA representative for Mexican president-elect Andres Manuel Lopez Obrador, has predicted that the nations will agree on a softened version of a so-called "sunset clause", an automatic expiration after five years - a key US demand.

"For some time now, (Trump) has been very prudent in referring to Mexicans, or he hasn't said offensive things", Lopez Obrador said. The recent push for a deal is in part to have it signed before the new president takes office in December.

Canada's Foreign Affairs Minister, Chrystia Freeland, said recently she was waiting on the US and Mexico to resolve their differences on automotive rules of origin before returning to the table.

Trump hinted that a deal was near in a Saturday morning tweet.

Still, any new agreement is far from final.

Republican lawmaker Kevin Brady, chairman of the tax and trade-focused Ways and Means Committee, called on Canada to return to talks quickly "with the aim of concluding a modern, seamless three-way agreement".

Like this: