US, Mexico sign into new deal ahead of overhauling NAFTA
28 August 2018
The United States and Mexico hammered out a new agreement overhauling the North American Free Trade Agreement (NAFTA) and arriving at a separate deal without Canada.
While details of the deal were yet to come, a separate deal with Mexico is expected to put pressure on Canada to agree to new terms on auto trade and dispute settlement rules if three-nation pact NAFTA is to remain.
Auto stocks soared and the S&P 500 and the Nasdaq rallied to record highs on the expectation that Canada would sign onto the deal and ease the uncertainty caused by US President Donald Trump's threats to ditch the 1994 accord.
“A lot of people thought we’d never get here because we all negotiate tough. We do, and so does Mexico. And this is a tremendous thing,” US President Donald trump said.
But he said what was once NAFTA (north American Free Trade Agreement), will now be United States-Mexico Trade Agreement, adding that NAFTA will no longer be relevant.
The United States, the President said, was hurt very badly by NAFTA for many years and the new deal is really good for both countries.
Mexican President Pena Nieto welcomed the “very positive” outcome for the United States and Mexico, adding that negotiating peace on NAFTA, in the interest of renewing, modernizing and updating it in order to generate a framework that will boost and potentiate productivity in North America, is something to celebrate.
He also expressed the wish to bring in Canada into the new deal. “And I assume that they going to carry out negotiations of the sensitive bilateral issues between Mexico — rather, between Canada and the United States.
President Trump, however, said the agreement is an extremely complex one and it’s something that will be discussed for many years to come.
As far Canada is concerned, Trump said, “We haven’t started with Canada yet. We wanted to do Mexico and see if that was possible to do. And it wasn’t — I think, it wasn’t from any standpoint something that most people thought was even doable when we started.
“If you look at it, you remember, at the beginning, many people thought that this was something that just couldn’t happen because of all of the different factions, all of the different sides, and the complexity. And we made it much simpler, much better.”
Canada will start negotiations shortly. I’ll be calling the Prime Minister very soon. And we’ll start negotiation, and if they’d like to negotiate fairly, we’ll do that. You know, they have tariffs of almost 300 per cent on some of our dairy products, and we can’t have that. We’re not going to stand for that.
I think with Canada, frankly, the easiest thing we can do is to tariff their cars coming in. It’s a tremendous amount of money and it’s a very simple negotiation. It could end in one day and we take in a lot of money the following day.
After a year of tough negotiations, the United States and Mexico reached a trade agreement that Vice President Mike Pence said, is fair and reciprocal and will strengthen both nations’ economies.
“Today marks a new chapter between the United States and Mexico – one built around friendship, security, commerce, and prosperity. The US–Mexico Trade Agreement is a win for American ranchers, manufacturers, and auto workers.
“Our nations have agreed to new rules that will maintain duty free access for agricultural goods on both sides of the border. In addition, we have agreed to eliminate non-tariff barriers and take other steps to encourage more agriculture trade between our two countries,” he said.
The reworked trade deal includes the strongest yet enforceable labor standards, he said and credited Mexican President Peña Nieto and his negotiating team for their good faith efforts to get this deal done.
“Today is a win for the American people and we look forward to working with members of Congress in both parties to swiftly approve this new trade agreement.”