The US and Mexico have reached a trade agreement to replace the North American Free Trade Agreement (NAFTA), leaving Canada in the cold.
President Donald Trump said on Monday, the document will be called the “Trade Agreement between the US and Mexico”.
“We’ll get rid of the name NAFTA, it has a bad connotation because the United States was hurt very badly by NAFTA for many years,” the president stressed.
“It’s a big day for trade, it’s a big day for our country,” Trump told journalists.
Mexico’s President Enrique Peña Nieto, speaking on a conference call, expressed the hope that Canada would eventually be included in the agreement.
Trump said that the call was organized to “celebrate the mutual understanding” that the parties managed to reach. “This is an incredible deal for both sides,” he said.
The Mexican leader in turn expressed hope for the “renewal and modernization” of NAFTA, whereas Trump, judging by his rhetoric, considers the agreement concluded 24 years ago to be buried.
Trump told the Mexican colleague that an official press conference will be held “in the not so distant future”.
“This is something very positive for the United States and Mexico,” Peña Nieto said, adding that he was looking forward to the opportunity to commend the agreement reached with a glass of tequila along with Trump, and thanked him for “political will in this matter.”
According to Trump, Mexico agreed to immediately begin to buy the maximum possible number of agricultural products from the US.
Peña Nieto resigns on December 1, giving way to his successor, the leftist politician Andres Manuel López Obrador. Thus, the Mexican legislators do not have much time to ratify the agreement before the change of administration.
The White House is expected to officially notify Congress by the end of the week to sign a new trade agreement within 90 days.
“The agreement is likely to be signed at the end of November,” said US Trade Representative Robert Lightheiser, who also attended the Oval Office during a conversation between the two leaders.
Trump has repeatedly lambasted NAFTA the worst trade agreement in history and often resorted to particularly tough rhetoric against Mexico.
The president, who believes that the agreement cost the country a lot of jobs in industry, repeatedly threatened to pull out from NAFTA, which came into effect under the Clinton administration in 1994.
Trump also rejected a number of other international agreements, including the Trans-Pacific Trade Partnership and the Paris Climate Agreement, saying that he preferred to conclude agreements with other countries in a bilateral format.
Trump also said he would soon call Canadian Prime Minister Justin Trudeau, making it clear that the US is open to negotiations if Canada is ready to lead them honestly.
“Frankly, a tariff on cars is the much easier way to go,” he added.
Meanwhile, Ottawa demonstrates steadfastness. A spokesman for Canadian Foreign Minister, Adam Austin said that Canada maintains a constant relationship with the negotiators on NAFTA. “We will only sign a new NAFTA that is good for Canada and good for the middle class,” he stressed, adding that the signing of a new treaty requires the signature of Canada.”
“We hope that now Canada will be able to join,” Lightheiser told reporters.
The White House emphasizes that the goal of the statement of the two leaders is not to put pressure on Canada.
“Leaving Canada out of a new NAFTA would be a mistake and it is questionable whether the Office of the U.S. Trade Representative has the authority under current Trade Promotion Authority legislation to conclude just a bilateral with Mexico,” said Aina Manak, a visiting researcher at the Cato Institute, an expert on trade disputes. “What happens next is anyone’s guess, but we should keep our eyes open for the return of Canada’s Foreign Minister, Chrystia Freeland, to Washington to wrap up the discussions soon.”
The volume of trade between the three North American countries is about a trillion dollars a year.