Wall Street surged overnight, with the S&P 500 and Nasdaq indices hitting fresh records on news that the United States and Mexico have agreed to enter into a new trade deal to replace the North American Free Trade Agreement (NAFTA). The announcement came after more than a year of NAFTA negotiations between the U.S., Canada and Mexico, as Trump faces looming midterm elections in which he is aiming to reassure farmers and others in his base that his aggressive trade policy is getting results.
One of the most fundamental parts of Trump's campaign for president was his promise to change America's deeply flawed trade arrangements.
Mr. Lopez Obrador called for a three-way trade deal, saying "it's important that Canada also be included".
U.S. Trade Rep. Robert Lightizer and Mexican Secretary of Economy Idelfonso Guajardo walked together into the White House without talking to reporters.
"It will be necessary for Canada to rejoin the negotiations and for an agreement to be reached among all parties before a judgement can be made".
The U.S. Commerce Department also said on Monday that Chinese steel wheels exports were heavily subsidized and that it could impose duties on the product. The average wage for Mexican workers in vehicle assembly plants is under $8 per hour, and under $4 per hour for workers in parts plants, according to the Center for Automotive Research. A fact sheet describing the bilateral agreement specified the content would be made in the United States and Mexico.
But first, he said, he would give Canada a chance to get back in - "if they'd like to negotiate fairly". "So if they had to compromise on energy, so be it".
"We could have a separate deal (with Canada) or we could put it into this deal", Trump said. "It's not part of a negotiating strategy", said one administration official. (The Administration said Monday that it believes that it has met its legal requirement).
Mr Trump's remarks are his latest in recent weeks to suggest he doesn't see a quick end to trade tensions with China, stoking concerns in Beijing that his actions are part of a wider plan to contain the nation's rise. "These rumored trade provisions would codify the administration's savage attacks on environmental protection, food safety, and consumer rights into trade deals that enshrine and globalize deregulation, making it harder to restore US environmental and consumer protections once this administration is shown the White House door".
Now, Trump can point to this US-Mexico agreement, and the rekindled prospects for a new NAFTA, even if it's unlikely to have a a big impact on American workers and companies.
World stocks rose to a six-month high on Tuesday, lifted by investor optimism that a U.S. -Mexico deal to overhaul the North American Free Trade Agreement will go some way to averting a global trade war. And possibly a second bilateral deal with Canada. He previously called it a "terrible deal". "If Canada's not in, we'll notify that we have an agreement with Mexico and we're open to Canada joining us". Details of the U.S. -Mexico agreement were expected to be unveiled later Monday.
Trudeau has insisted his government will only sign a deal that's good for Canada. Neither President Trump nor Peña Nieto mentioned the sunset clause during their announcement. "If we can help our neighbours, that's a good thing, not a bad thing".
"While the U.S. administration had been given special "fast-track" authority by Congress to seek a new NAFTA deal, it is unclear whether that applies to a bilateral agreement like this one (ie a deal that does not include Canada)". Last year, the United States of America had a large $71 billion trade in goods deficit with Mexico, owing in part to much lower worker pay.
The political stakes are high for all three countries. Reaching a deal with only Mexico would throw that industry into disarray, experts warned. A fresh round of tariffs on autos would be more painful. I said we were going to do this.
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