US, Mexico reach NAFTA deal, turn up pressure on Canada

In his televised phone call with his Mexican counterpart, President Trump said he may seek a separate trade deal with Canada and even scrap the name NAFTA. But that doesn’t do anything to clear up the other sticking points that have clogged NAFTA talks for more than a year, notably including Trump’s longstanding demand for better access to Canada for USA dairy exports.

Dairy is a politically charged issue that many analysts have predicted would be among the final issues settled in the NAFTA renegotiation.

Adam Austen, who speaks for the foreign affairs minister, says Canada had been in regular contact with the NAFTA negotiators. The danger, however, is that the trade war the president used to get all sides to the table might cause damage to the American economy while details are being worked out. The Trump administration is also seeking a sunset clause that would end the pact after five years, unless the three countries explicitly agree to continue it.

“It’s a big day for trade, big day for our country”.

President Donald Trump’s declaration of victory Monday in reaching a preliminary deal with Mexico to replace the North American Free Trade Agreement raised at least as many questions as it answered.

Washington hopes Canada will fall into line as Trump’s new global trade regime takes effect. But as the Oval Office pushback showed, there are more reasons than usual to be skeptical of Trump’s sales pitch on the new free trade agreement.

Al Jazeera’s Kimberly Halkett, reporting from Washington, DC, said Trump was “delivering” on promises made during his successful presidential campaign to renegotiate major trade deals affecting United States workers.

Trump then dangled the possibility of imposing harsh auto tariffs to punish Canada.

But Canada may not feel the pressure to hurry. But Trump has called the agreement “the worst deal maybe ever signed” and moved ahead with tariffs earlier this year. “Canada’s signature is required”. “For a prosperous, stable region, all three countries must be part of the deal”.

USA and Mexico have signalled they’d like to see a deal by week’s end to ensure an agreement can soon be sent to Congress for its mandatory 90-day study. “I am thankful to the administration for reaching an agreement that modernizes this crucial trade pact”.

Over the weekend, USA and Mexican negotiators worked to narrow their differences, capping talks that had begun a year ago and have proved highly contentious.

Instead, senior USA officials told reporters the agreement had been extended for 16 years but would be reviewed every six years.

Wei Jianguo, a former Chinese vice-minister of commerce and now a researcher at the think tank, said China’s annual sales to Africa could exceed US$500 billion within five years, making that continent a bigger market for Chinese exporters than the U.S., though the Chinese products sold to Africa may not be the same as those sold to America.

At 9:50 a.m. EDT the Dow Jones Industrial Average .DJI was up 57.86 points, or 0.22 percent, at 26,107.50, the S&P 500 .SPX was up 4.91 points, or 0.17 percent, at 2,901.65 and the Nasdaq Composite .IXIC was up 11.95 points, or 0.15 percent, at 8,029.84. “That is the great value of the announcement that we’re making today”.

The monitoring committee of the Organization of the Petroleum Exporting Countries found that oil producers participating in a supply-reduction agreement, which includes non-OPEC member Russian Federation, cut output in July by 9 percent more than called for. “Both NZ and Australia are far more leveraged to that story and while the PBoC is perhaps taking a more conciliatory tone here, visible progress on trade between the United States and China is yet to be seen”.

The new deal requires 75 per cent of the value of a vehicle to be produced in the United States or Mexico, up from the NAFTA threshold of 62.5 per cent.