Stocks rally as USA and Mexico reach deal to replace NAFTA

Stocks rally as USA and Mexico reach deal to replace NAFTA

President Trump made the announcement and brought Mexican President Enrique Peña Nieto onto a conference call.

Donald Trump declared victory on trade with Mexico Monday morning, announcing a preliminary agreement on a revised North American Free Trade Agreement.

Calling the deal "very good" for U.S. farmers and manufacturers, Mr Trump said Mexico has agreed to purchase "as much farm product as possible" immediately.

"We'll see if Canada can be part of the deal", he said.

The need to involve Canada and the Mexican presidential transition mean a comprehensive deal won't be approved by Mexico until December at the earliest. But Trump and U.S. Trade Representative Robert Lighthizer said Monday that they plan to send a Mexico-U.S. deal to Congress by Friday to start the clock on the waiting period.

USA and Mexico teams rushed to strike a deal this year before the inauguration of Mexico's President-elect Andres Manuel Lopez Obrador, a far-left politician. Today he again vowed to raise auto tariffs on Canada if it refuses to revise unfair levies of almost 300 percent on some American goods, among other unfair practices.

Read the full report at Fox News.

Foreign Affairs Minister Chrystia Freeland is in Germany on Monday, but received updates from both the Americans and the Mexicans throughout the weekend.

The US-Mexico deal would require 75 percent of auto content to be made in the NAFTA region, up from the current level of 62.5 percent, a second US official said.

"I think with Canada, frankly, the easiest thing we can do is to tariff their cars", Trump told the assembled press in the Oval Office on Monday. He also said he would "be terminating the existing [NAFTA] deal very soon" because NAFTA has "a lot of bad connotations" and has been a "bad deal" for the United States.

"We are starting negotiations with Canada pretty much immediately", Trump said. According to one 2013 study, NAFTA was directly responsible for raising the U.S. trade deficit with Mexico from $17 $177 billion, and cost the USA over 850,000 jobs. A month of talks followed, in August, but a new roadblock emerged: Mexico's outgoing administration had a different position on foreign access to the country's energy sector than the incoming one, which delayed an agreement to this week. He said the US, which wants Canada to loosen its protection of the supply-managed dairy industry, has not had "market access conversations with Canada of any substance".

Still, an accord between the US and Mexico is the biggest development in talks that began a year ago, punctuated by Trump's repeated threats to quit altogether. They then would either agree to a new 16-year deal or the pact would expire.

Now Ottawa will rejoin the talks but hurdles like dispute panels remain. "Canada's signature is required", spokesman Adam Austen said. Trump flipped states like Michigan, Pennsylvania, and OH from Democrat to Republican in 2016 by promising economic prosperity in part by improving trade deals.

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