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Trump makes trade announcement at the White House, possibly on NAFTA deal

28 August 2018

On Monday morning, President Trump officially announced the end to NAFTA, the longtime Clinton era-trade agreement between the U.S., Mexico and Canada.

"Progress between Mexico and the United States is a necessary requirement for any renewed NAFTA agreement", he said.

Trump said the conference call, which was broadcast live on television on Monday, was being held to "celebrate the understanding" the United States and Mexico have reached on trade, calling it "an incredible deal for both parties".

The agreement between the two countries could restart negotiations on NAFTA with all three parties - the United States, Mexico and Canada. He also said talks with Canada have yet to begin. Canada and Mexico pushed back at that, saying it would cause uncertainty, as investors would be unlikely to spend money to expand plants if they anxious the deal could be torn up at any moment, robbing them of access to the USA market.

There is one bilateral difference left to iron out, Mexican Economy Minister Ildefonso Guajardo told reporters early on Monday as he entered the Washington office of the U.S. Trade Representative's office where negotiations are going on.

"Once the bilateral issues get resolved, Canada will be joining the talks to work on both bilateral issues and our trilateral issues", Chrystia Freeland, Canada's foreign minister, said Friday.

Under Monday's preliminary agreement, Mexico agreed to ensure that 75 percent of automotive content be produced within Mexico and the US, up from the current 62.5 percent, according to the Office of the US Trade Representative.

The U.S. president also threatened America's northern neighbor with penalties if there is no agreement.

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NAFTA is blamed for hastening the demise of US manufacturing as automakers and other manufacturers moved factories south of the Rio Grande. A formal ceremony, Trump said, will take place later.

Trump has promised to dismantle (or at least overhaul) the historic agreement for years.

The president said he plans to "terminate" the existing NAFTA agreement, which now includes Canada.

Trump says the details are still being finalized but noted the deal is good for trade, jobs and farmers.

Observers have raised concerns that Canada's absence from the talks could put Ottawa in a position where it might be pressured into accepting a deal reached between the US and Mexico. He also said he would "be terminating the existing [NAFTA] deal very soon" because NAFTA has "a lot of bad connotations" and has been a "bad deal" for the United States.

Wall Street is giving a big thumbs-up to President Trump's deal to replace NAFTA.

"NAFTA revocation would lower real incomes in the large majority of sectors in all three NAFTA countries, and that average wages would fall in almost all regions in North America", Auer wrote. If there were any issues, they could agree to meet on an annual basis to make sure outstanding issues didn't "fester" as one senior White House official put it.

There is no deal reached yet with Canada, people familiar with the agreement said.

Trump makes trade announcement at the White House, possibly on NAFTA deal