US, Trump, Mexico NAFTA trade deal: auto, agricultural details

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President Trump announced a tentative deal to restructure a trade deal, which could eliminate the North American Free Trade Agreement, also known as NAFTA. In the past, Mexico has insisted that any NAFTA deal be trilateral, and Peña Nieto seemed to suggest a similar vein of thinking Monday, repeatedly telling Trump that he wanted Canada to be a part of the new deal.

Trump strongly campaigned on the issue of repealing or completely redoing NAFTA, a trade deal he argues was "terrible" for the United States and destroyed manufacturing in states across the country.

Canada has publicly opposed such changes, but it's possible the United States and Mexico will make rapid concessions, since they're eager to get a deal done this week, so the ink can dry before a new Mexican president takes office.

Canada's role: While the deal is just between the USA and Mexico, the hope is that Canada will "negotiate fairly" to join the agreement at a later date, enter into a separate deal, or face automobile tariffs. "It has a bad connotation because the United States was hurt very badly by NAFTA for many years", President Trump said.

Analysts at ANZ Bank New Zealand, (ANZ), explained that the United States and Mexico have reached a trade agreement that will replace a soon-to-be-terminated NAFTA bill, according to both Presidents in a joint announcement.

U.S. Trade Rep. Robert Lightizer and Mexican Secretary of Economy Idelfonso Guajardo walked together into the White House without talking to reporters. "Perhaps, the other would be much better for Canada". They said a "trade war" would be self-defeating.

Canada, which has not participated in the negotiations in recent weeks, had said the dispute settlement system was a priority. "Progress between Mexico and the United States is a necessary requirement for any renewed NAFTA agreement".

None of that stopped Trump from giving the impression on Monday morning that he was "terminating" NAFTA "and going into this deal" with Mexico.

If auto content and wage agreements go forward with Canada on board as well, it could stem the flow of auto sector jobs to lower wage jurisdictions, Unifor president Jerry Dias said. The US trade representative's office officially described the agreement as "a preliminary agreement in update the 24-year-old NAFTA with modern provisions representing a 21st century".

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"We've made a deal with Mexico, and we'll get started with Canada "immediately", Trump said".

The U.S. wants Canada to agree to change its dairy and intellectual protection policies, among other things, while Canada wants the drop tariffs on steel and aluminum imports.

"I desire, I wish that the part with Canada will be materializing in a very concrete fashion, and we can have an agreement the way we proposed it from the initiation of this renegotiating process, a tripartite", Peña-Nieto said through a translator.

The sides also agreed that 40-45 percent of cars must be made at "high wage" factories where workers receive $16 an hour in order to receive duty-free treatment, something that could deter off-shoring U.S. auto manufacturing to Mexico.

The editorial board pointed to the exclusion of Canada from the deal as one of its shortcomings.

"I talked to the President @realDonaldTrump".

But some industry groups said they wanted more clarity on final terms before celebrating the deal.

The move, sought by the United States, puts Canada in a hard position because Prime Minister Justin Trudeau had insisted on maintaining Chapter 19 as a way to fight US duties on softwood lumber, paper and other products that it views as unfair.