Donald Trump announces new trade deal with Mexico

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This new deal will limit Mexico's ability to take USA manufacturing jobs by underpaying workers.

They said nothing could come from Trump's unilateral imposition of tariffs in order to get foreign governments to negotiate seriously. Those are the words of Mexico's Economy Minister Ildefonso Guajardo last week as he summarized the progress of talks to renegotiate the North American Free Trade Agreement, according to The Wall Street Journal. "A big Trade Agreement with Mexico could be happening soon!"

During an Oval Office briefing with reporters, Trump awkwardly spoke with Mexican president on speaker-phone, hailing the new agreement as a breakthrough.

-Canada Tags Back In: One of the core NAFTA fights has been on cars - namely, low Mexican wages luring manufacturing jobs to the country.

Although the deal will not be finalized immediately, the progress in negotiations comes as a relief to USA businesses that find themselves in the middle of trade wars with Mexico, Canada, China and the European Union, The New York Times reported.

"We will only sign a new NAFTA that is good for Canada and good for the middle class", said Adam Austen, a spokesman for Freeland, adding that "Canada's signature is required".

He took a jabs at the Canadian government, saying talks could move quickly "if they'd like to negotiate fairly" and again saying the "easiest thing we can do is tariff their cars coming in" to retaliate for its import fees on USA dairy products.

Trump has even called Canada a "national security threat" for what he views as a harmful trade policy that takes advantage of the United States. He long has said he favors trade pacts only between Washington and one other country.

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U.S., Mexican and Canadian stocks opened higher on Monday on optimism about a trade deal.

In the meantime, the White House will begin negotiating with Canada to either add their country to the trade agreement with Mexico or strike a separate deal.

Lighthizer contended it will mean "more jobs for American workers and farmers, but also more workers and farmers from Mexico". Blaming Canada for the declining state of the USA manufacturing sector, he has launched a rhetorical attack against the country to the north in order to gain favour among white working class constituents.

A final deal would need sign-off from Canada, the third country in the treaty, which governs more than $US1 trillion ($NZ1.49t) in annual trade.

He said: "If they'd like to negotiate fairly, we'll do that".

Trump said the conference call, which was broadcast live on television on Monday, was being held to "celebrate the understanding" the USA and Mexico have reached on trade, calling it "an incredible deal for both parties". The call finally was connected. He said he may include Canada in the Mexican deal. But a senior Administration official insisted that wasn't the case on a conference call with journalists.

Trump says he will be calling Prime Minister Justin Trudeau. "It's not part of the strategy or anything".

"There likely will be a deal today", said Daniel Ujczo, a trade attorney with Dickinson Wright PLLC who has followed the NAFTA talks closely.

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