Treasury’s Mnuchin Hopeful Trade Deal With Canada Will Get Done

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"Trade Representative Robert Lighthizer appears to have weakened US demands that the new deal should include an automatic five-year break clause, under which the agreement would need to be explicitly renewed by the legislative bodies in each of the three countries", Ashworth said.

"A lot of [US-based] jobs went to Mexico, where the labour supply was cheaper", she added. Though details of the new agreement are still unclear, it will predictably become less profitable for Canada than under NAFTA, which was condemned by the United States president as the "single worst deal ever approved".

Does Trump have the final say? Those manufacturers also would need to use more steel, aluminum and auto parts from local sources. "The announcement on a preliminary agreement with Mexico is a critical step in the right direction". "This doesn't seem like a well-thought-out plan that leads anywhere sensible".

Speaking at the White House on Monday, President Trump said he wanted to change the NAFTA name to the U.S. Mexico Free Trade Agreement.

Al Jazeera's John Holman, reporting from Mexico City, said outgoing President Nieto "probably had to make sacrifices" to protect a trade agreement with the U.S., with a possible outcome being the flight of vehicle manufacturing companies from the country. The three countries had been having trilateral negotiations for a year, until May. "It's important for them to get this deal and it's important for us to get this deal".

If this new trade agreement puts an end to threated tariffs against Mexico, that would be a good thing.

Duty-free access to farm products will also stay in the deal, and Mexico agreed to immediately start buying as many us farm products as possible. Mexico recently opened its oil and gas sector to foreign investors, including many from the United States.

Canada hasn't participated in the renegotiations for two months.

Rival Bank of Montreal sat flat after topping third-quarter earnings estimates, helped by growth in the United States. NAFTA specifies 62.5 per cent. "So if they had to compromise on energy, so be it".

Ross and Kudlow took to the US airwaves hours ahead of the expected arrival in Washington of Foreign Affairs Minister Chrystia Freeland, Canada's top negotiator and other senior officials, where they are set to resume talks with the USA and Mexico. The negotiations were "difficult" at times, Peña Nieto said, but added that the new framework would boost productivity in North America.

A Canadian Foreign Ministry spokesperson said earlier on Monday that Ottawa was encouraged by "progress" between the USA and Mexico, but cautioned any new version of NAFTA would need to be beneficial for Canada before being signed off on by officials. (The Administration said Monday that it believes that it has met its legal requirement).

First, though Trump declared NAFTA dead, only Congress can actually undo the legislation that created the three-way trade bloc in 1994. Ben Sasse, a critic of Trump's trade policy, said in a statement.

Regardless of the roiling debate about US trade law and negotiating tactics, Trump's imperiously dismissive tone about Canada today leaves little doubt the Washington-Ottawa relationship is badly frayed.

Trump said Monday that he hopes Canada will join the deal by Friday, a move which seemed meant to bring Canada, to the table quickly and limit the country's ability to press its own concerns. And possibly a second bilateral deal with Canada.

"Canada has been frozen out of those bilateral (U.S. -Mexico) talks in recent weeks, and will now be under heavy pressure to give ground".

If there is to be an update of NAFTA, Canada will have to agree to the new provisions announced by the United States and Mexico.

Not even pushback from import-sensitive businesses and members of Trump's own party have prompted the president to back down in any meaningful way. But it raises questions about the country's relationship with Canada and the possibility of redrawing the North American Free Trade Agreement. The U.S. had originally pushed for 85 per cent.

The White House is also expected to formally notify Congress by the end of this week of its intention to sign a new trade agreement within 90 days.

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 USA and Mexico.

U.S. Treasury Secretary Steven Mnuchin told CNBC on Tuesday that he believed the United States could also reach a trade deal with Canada this week. A fresh round of tariffs on autos would be more painful.

"We are very interested in this being an agreement of three countries", said President-elect Andres Manuel Lopez Observador.

The U.S. dollar index, which measures the greenback's strength against a basket of six major currencies, remained under pressure after the news, falling 0.38% to 94.72 as of 11:26 AM ET (15:26 GMT).