United States President Donald Trump on Monday said Washington and Mexico have agreed to revise key portions of the North American Free Trade Agreement and would finalise it within days, reported The New York Times. Trump’s move is seen as putting pressure on Canada to agree to the new terms on auto trade and dispute settlement rules to remain part of the three-nation pact or face tariffs.
“I’ll be terminating the existing deal and going into this deal [with Mexico],” Trump told reporters in the Oval Office on Monday, according to The Guardian. “We’ll start negotiating with Canada relatively soon. They want to negotiate very badly.”
“One way or the other, we have a deal with Canada,” the US president said. “It’ll either be a tariff on cars or it will be a negotiated deal. Frankly, a tariff on cars is a much easier way to go but perhaps the other would be much better for Canada.”
Trump said the new deal will be called the “United States-Mexico Trade Agreement” since the term Nafta had “a bad connotation” for the US. He has previously called Nafta the “worst trade deal” in history.
Nafta reduced trade barriers between the US, Mexico and Canada. But Trump blames the 1994 deal for a decline in US manufacturing jobs, especially in the auto industry, BBC reported.
Meanwhile, Canadian Prime Minister Justin Trudeau said he had a “constructive conversation” Trump after US and Mexico agreed on a revamped deal. Canada’s Foreign Minister Chrystia Freeland will negotiate with US counterparts in Washington on Tuesday, reported PTI.
Trudeau also spoke to outgoing Mexican President Enrique Pena Nieto on Sunday, and the leaders shared their commitment to reaching a successful conclusion of Nafta “for all three parties”.
Trump plans to notify Congress that he has reached a deal with Mexico, but would be open to Canada joining if talks with Canada are not concluded this week, US trade representative Robert Lighthizer said, according to Reuters. The White House has said Trump will sign the deal in 90 days, but it has to be first approved by Congress.