President Donald Trump announced America has entered a “United States-Mexico Trade Agreement” from the White House, dumping the name NAFTA due to bad connotations.
Trump hopes to start negotiations with Canada ASAP. He said “we’ll see” if Canada will join this agreement or have a separate agreement.
Trump said the NAFTA name will go “because it has a bad connotation” since NAFTA has treated America badly. From The Associated Press:
President Donald Trump says he’ll be “terminating” the North American Free Trade Agreement as he pursues a deal with Mexico and starts negotiations with Canada.Trump said Monday during an Oval Office event that he’ll be calling the emerging agreement the “United States-Mexico Trade Agreement.” He says it will mark the end of the NAFTA name.Mexican President Enrique Peña Nieto was on speakerphone and says he hopes NAFTA partner Canada will eventually be incorporated into the deal from Trump.Adam Austen, a spokesman for the Canadian Foreign Minister, says Canada had been in regular contact with the NAFTA negotiators.He says, “We will only sign a new NAFTA that is good for Canada and good for the middle class,” adding that, “Canada’s signature is required.”
One of Trump’s officials said he expects the official signing will take place in November since Congress has to approve any trade detail. Depending on the timetable, he will exterminate the NAFTA deal and enter into this deal with Mexico.
Unfortunately, we didn’t receive any details about the deal, but some news organizations wrote about some. From Fox News:
U.S. Trade Rep. Robert Lightizer and Mexican Secretary of Economy Idelfonso Guajardo were seen walked together Monday into the White House without talking to reporters. The delegation also included Jesus Seade, a World Trade Organization veteran tapped by Mexican President-elect Andres Manuel Lopez Obrador as his future chief trade negotiator.The U.S. on Thursday agreed to keep the 2.5 percent tariff currently applied under World Trade Organization rules if the cars are made at factories that already exist, which leaves open the possibility that automobiles that are built at new plants could face tariffs of 20 percent to 25 percent.
Bloomberg reported that the Mexican president-elect Andres Manuel Lopez Obrador predicted a change to the sunset clause:
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 U.S. demand. The recent push for a deal is in part to have it signed before the new president takes office in December.That would be essential, as the sunset clause was a major sticking point — erupting, for instance, at the Group of Seven summit. Other key issues are Chapter 19 anti-dumping panels, which the U.S. wants to kill but which may be a deal-breaker for Canada, as well as Canada’s dairy sector, which Trump is targeting.
Trump tweeted this morning:
The stock market has reacted positively to the announcement. From WDIV:
KEEPING SCORE: The S&P 500 index climbed 18 points, or 0.6 percent, to 2,892 as of 10 a.m. Eastern time. The Dow Jones Industrial Average jumped 208 points, or 0.8 percent, to 26,002. The Nasdaq composite gained 55 points, or 0.7 percent, to 8,001. The Russell 2000 index of smaller-company stocks added 9 points, or 0.5 percent, to1,735.The S&P 500 closed at an all-time high Friday, beating the record it set in late January. The Nasdaq and Russell 2000 also set new highs, but the Dow remains about 2 percent below the record it set in late January.
It looks like the NAFTA name will change:
From Politico:
U.S. trade negotiators briefed congressional staff this morning on the details of the agreement between the U.S. and Mexico.Mexican Economy Secretary Ildefonso Guajardo said this morning that there’s one U.S.-Mexico issue that remains to be fully resolved before the talks between the two countries are complete. But he cautioned that Canada must still go over all the solutions that the U.S. and Mexico reached. Canada is expected to return to the negotiating table as soon as the two countries announce a breakthrough in the U.S.-Mexico talks.“A lot of these things imply Canada. Therefore, until we finish with the position of Canada, we will not be able to disclose the elements,” Guajardo said.
Canadian Foreign Minister Chrystia Freeland said that once the US and Mexico resolve their issues, “Canada will be joining the talks to work on both bilateral issues and our trilateral issues.”
A senior US official told Reuters that the US is “now inviting the Canadians in as well” and acknowledged that issues remain with our northern neighbor, but that “they could be resolved very quickly.”
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