Published: Mon, August 27, 2018
Money | By Ethel Goodwin

Trump's new trade deal with Mexico doesn't include Canada

Trump's new trade deal with Mexico doesn't include Canada

United States and Mexican negotiators have been working for weeks to iron out differences in order to revise the almost 25-year old North American Free Trade Agreement, while Canada was waiting to rejoin the negotiations.

Trump responded by saying that he would call Canadian Prime Minister Justin Trudeau soon, and that the US would be open to including its northern neighbor in the new deal if it "wants to negotiate fairly".

Al Jazeera's John Holman, reporting from Mexico City, said outgoing President Nieto "probably had to make sacrifices" to protect a trade agreement with the USA, with a possible effect being the flight of vehicle manufacturing companies from the country.

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

The U.S. -Mexico talks have been trying to make a breakthrough on the deal's automotive chapter, after talks to redefine what should constitute a tariff-free North American vehicle broke down prior to the Mexican presidential election in July.

What's in the new version of the deal?

Under its mandate from the U.S. Congress, American negotiators are only authorized to negotiate a trilateral NAFTA agreement.

Rather, it would be a sub-deal that will now be folded into the ongoing three-country talks over the future of NAFTA.

The US and Mexico reached a tentative deal to revise parts of NAFTA, and the White House was expected to announce the news later Monday morning. Trump also said the USA would put tariffs on Canadian cars or reach a negotiated deal with them. By definition, we buy more from them than they buy from us, which gives us the power any major consumer has over a seller. Trump said he would talk to Canadian Prime Minister Justin Trudeau soon.

El Financiero reports negotiators have already called on Canada to rejoin the talks now that a U.S. -Mexico bilateral agreement has been reached, and Canadian representatives could arrive in Washington, early as Monday.

Reporters have been waiting all weekend for the USA and Mexico to announce their handshake deal. Canada, so far, has been excluded from the talks as Mexico and the US resolve their issues.

Adam Austen also wrote in an email that Canada would continue to work toward a modernized NAFTA.

Trump complained about Canada's dairy tariffs again on Monday.

"Millions of jobs in Texas depend on an updated NAFTA, and it's important that we get this right", said Senator John Cornyn, the No. 2 Republican in the Senate. Today he again vowed to raise vehicle tariffs on Canada if it refuses to revise unfair levies of almost 300 percent on some American goods, among other unfair practices. Officials will have to decide whether to succumb to pressure from a joint agreement between the USA and Mexico or risk economic insecurity.

On cars, the two sides also settled on rules that will require 40-45 percent of each vehicle to be made by workers earning at least $US16 an hour.

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