Media playback is unsupported on your device Media caption Donald Trump speaks with the Mexican leader on the phone through an interpreter

The US and Mexico have agreed to revamp Nafta, the North American Free Trade Agreement, in what Donald Trump called a "really good deal" for both countries.

The US President, who has frequently criticised the existing deal, made the announcement on Monday.

Canada - the other member of Nafta - is yet to agree to the new terms and will hold more discussions on Tuesday.

Mr Trump had threatened to pull out of the deal, triggering a year of talks.

He demanded a renegotiation of the 1994 trade agreement, which he blames for a decline in US manufacturing jobs, especially in the car industry.

US shares rose and the Mexican peso strengthened on news of the preliminary deal on Monday.

What has Trump said?

Mr Trump said the US and Mexico had agreed on terms that would make for a deal that was "much more fair".

Negotiators have been rewriting the Nafta treaty over the past year, but in the past five weeks, Canada has not been part of the discussions.

"We will see whether or not we decide to put up Canada or just do a separate deal with Canada," Mr Trump said.

He also threatened Canada with tariffs on cars and said he wanted to get rid of the name Nafta, which he said has "bad connotations".

Where does Canada stand?

Canadian Prime Minister Justin Trudeau has had a "constructive conversation" with Mr Trump since the deal with Mexico was announced, his office said.

Canadian foreign minister Chrystia Freeland is expected to travel to Washington DC for talks on Tuesday.

Image copyright EPA Image caption US President Trump announced the new trade deal in front of a Mexican delegation

Why now?

Negotiators want to agree a deal before the newly elected Mexican president, Andres Manuel Lopez Obrador, takes office in December. He has been reluctant to continue Enrique Pena Nieto's police of opening up of Mexico's energy sector, which could complicate negotiations.

In order to meet that deadline, the Trump administration must present Congress with a deal at least 90 days in advance - meaning the deadline is this Friday.

However, Mr Obrador said on Monday that the two-way agreement with the US was just the first step in a new treaty.

"We're very interested in it remaining a three-country deal," he said. "The free-trade agreement should remain as it was originally conceived."

Will Canada join?

A spokesman for Ms Freeland said the country was "encouraged" by the progress made by the US and Mexico but did not comment on the specific terms.

The US and Canada have been at loggerheads on a range of trade matters, including Canadian protections for its dairy industry and US tariffs on steel and aluminium.

"We will only sign a new Nafta that is good for Canada... Canada's signature is required," said spokesman Adam Austen.

A senior US trade official said: "There are still issues with Canada but I think they could be resolved very quickly."

In a televised telephone call with Mr Trump, Mr Pena Nieto stressed the importance of an agreement that includes Canada.

However, Mexican foreign minister Luis Videgaray said his country was prepared to strike a bilateral US-Mexico deal.

What's in the agreement?

Nafta covers more than $1tn (£780bn) in annual trade.

The update is to include provisions to govern intellectual property, digital trade and investor disputes, among other issues.

In the preliminary agreement announced on Monday, the US and Mexico agreed that 75% of a product must be made in the two countries to receive tax-free treatment - higher than in the existing deal.

Media playback is unsupported on your device Media caption If Nafta trade deal was a hamburger...

On cars, the two sides also settled on rules that will require 40% to 45% of each vehicle to be made by workers earning at least $16 an hour to discourage firms from moving production to lower-wage Mexico.

The pact would last for 16 years, the US said, and be reviewed every six years - but will not carry the threat of automatic expiration.

Can they meet the tight deadline?

Image copyright Getty Images

Politicians in all three countries have the final say over trade agreements.

In the US, Republicans, who typically support free trade, have pressed the White House to strike a deal, arguing that the relatively open borders have benefited American farmers and other groups.

Senator John Cornyn, a Republican from Texas, called the development a "positive step", adding: "Now we need to ensure the final agreement brings Canada into the fold and has bipartisan support."

The US Chamber of Commerce also said it was critical that the agreement continued to include Canada.</s>WASHINGTON (Reuters) - The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA), putting pressure on Canada to agree to new terms on auto trade and dispute settlement rules to remain part of the three-nation pact.

Auto stocks soared and the S&P; 500 and the Nasdaq rallied to record highs on the expectation that Canada would sign onto the deal and ease the economic uncertainty caused by U.S. President Donald Trump’s repeated threats to ditch the 1994 accord.

Details of gains and concessions in the deal were only starting to emerge on Monday. Trump threatened he still could put tariffs on Canadian-made cars if Canada did not join its neighbors and warned he expected concessions on Canada’s dairy protections.

“I think with Canada, frankly, the easiest we can do is to tariff their cars coming in. It’s a tremendous amount of money and it’s a very simple negotiation. It could end in one day and we take in a lot of money the following day,” Trump said.

Trump and Canadian Prime Minister Justin Trudeau discussed trade in a telephone call on Monday and “agreed to continue productive conversations,” White House spokeswoman Sarah Sanders said in a statement.

Negotiations among the three partners, whose mutual trade totals more than $1 trillion annually, have dragged on for more than a year, putting pressure on the Mexican peso MXN= and the Canadian dollar CAD=. Both currencies gained against the U.S. dollar after Monday's announcement.

The political stakes are high for all three countries. Trump and Republicans in the U.S. Congress up for re-election in November want to ensure farmers and other voters whose jobs depend on trade with Canada and Mexico that the deal is sealed.

Mexican President Enrique Pena Nieto wants to sign the agreement before leaving office at the end of November, and Trudeau faces a national election expected by October 2019.

Canadian Foreign Minister Chrystia Freeland is expected to travel to Washington for talks on Tuesday. Her spokesman said Canada would sign only a new agreement that is good for the country.

Trump’s economic adviser, Larry Kudlow, told reporters the deal with Mexico should serve as a “reset” for talks with Canada.

90-DAY WINDOW

If talks with Canada are not wrapped up by the end of this week, Trump plans to notify Congress that he has reached a deal with Mexico, but would be open to Canada joining, U.S. Trade Representative Robert Lighthizer told reporters.

The White House said Trump will sign the deal in 90 days. Congress has to approve it.

“There are still issues with Canada but I think they could be resolved very quickly,” a senior trade official told Reuters in an interview.

Some Republicans in Congress called the deal a positive step but said Canada must be part of the new pact.

Trudeau spoke to Pena Nieto on Sunday and shared their commitment to reaching a successful conclusion of NAFTA “for all three parties,” the prime minister’s office said.

Mexican Foreign Minister Luis Videgaray told a news conference in Washington that if Canada and the United States do not reach an agreement on NAFTA, “we already know that there will still be a deal between Mexico and the United States.”

NEW AUTO RULES

The Mexico-U.S. discussions focused on crafting new rules for the automotive industry, which Trump has put at the heart of his drive to rework a pact he has repeatedly described as a “disaster” for American workers.

Matt Blunt, president of the American Automotive Policy Council, which represents General Motors Co (GM.N), Ford Motor Co (F.N) and Fiat Chrysler Automobiles NV (FCHA.MI), said the group was optimistic about the new deal, though it was still reviewing the details.

U.S. President Donald Trump gets some assistance with a speakerphone call to Mexican President Enrique Pena Nieto to announce a deal to replace the North American Free Trade Agreement (NAFTA) at the White House in Washington, U.S., August 27, 2018. REUTERS/Kevin Lamarque

The 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 U.S. trade official said. A fact sheet describing the bilateral agreement specified the content would be made in the United States and Mexico.

That requirement could shift some auto parts manufacturing to Mexico from China, a White House official told Reuters, speaking on condition of anonymity.

The Trump administration said the deal improves labor provisions, in part by requiring 40 percent to 45 percent of auto content to be made by workers earning at least $16 per hour.

That measure could move some production back to the United States from Mexico and should lift Mexican wages, the White House official said.

A source in South Korea’s auto industry said many automakers would find it difficult to meet the rule on workers’ wages, which are much cheaper in Mexico. The trade minister said South Korea was analysing the deal’s impact on its auto industry.

Some Japanese automakers could face a similar challenge, but their responses on Tuesday were mostly positive.

“Toyota is pleased to hear that progress is being made by U.S. and Mexico negotiators to reach a consensus on modernizing NAFTA,” the car maker said.

“We are hopeful that any changes are fair and balanced.”

Nissan said it was “encouraged that an agreement was reached, and hope that it appropriately considers the impact on our employees, suppliers and customers.”

The United States relented on its demand for an automatic expiration for the deal, known as a “sunset clause.”

Instead, the United States and Mexico agreed to a 16-year lifespan for the deal, with a review every six years that can extend the pact for 16 years, Lighthizer said.

Slideshow (5 Images)

Mexico agreed to eliminate dispute settlement panels for certain anti-dumping cases, a move that could complicate talks with Canada, which had insisted on the panels.

Monday’s announcement lifted equity markets in all three countries, with shares in automotive companies standing out on relief that the deal appeared to end the uncertainty that has dogged the sector for months.

General Motors Co (GM.N), Ford Motor Co (F.N), and Fiat Chrysler Automobiles NV (FCAU.N) gained between 3.3 percent and 4.8 percent, while Canadian auto parts makers such as Magna International Inc (MG.TO) gained 4.6 percent.</s>The new trade deal between the United States and Mexico replaces the North American Free Trade Agreement.

But so far, Canada has not agreed to enter the deal.

The US, Mexico and Canada are all facing internal political pressure over the agreement.</s>The U.S. and Mexico reached an agreement on Monday to enter a new trade deal, ending months of talks on a replacement for NAFTA, an abbreviation for North American Free Trade Agreement.

The new trade pact will be called “The United States Mexico Trade Agreement,” Trump said when announcing the deal from the Oval Office, adding that the previous name would be scrapped.

“It’s a big day for trade, it’s a bid day for our country,” Trump said. “A lot of people thought we’d never get here because we all negotiate tough – we do, so does Mexico.”

Trump said the U.S. has yet to begin negotiations with Canada.

NAFTA has come under fierce scrutiny by President Trump, who called the agreement the “worst trade deal ever made.” Attempts to form a new pact faltered numerous times between the three countries, and talks with Mexico have been focused on creating new rules for the auto industry. Trump has argued that lower wages for employees in Mexico have cost jobs at General Motors, Ford and Fiat Chrysler – “The Big Three” – all of which have production sites in Mexico. The president said in June that a refurbished NAFTA deal could remain trilateral or could be renegotiated into two separate arrangements.

Canada said on Monday it would only sign a new NAFTA if it benefited the country and its middle class, despite showing optimism for progress the U.S. and Mexico made on a bilateral agreement of their own.

“Progress between Mexico and the United States is a necessary requirement for any renewed NAFTA agreement,” a spokesperson for Canada’s Foreign Minister Chrystia Freeland told FOX Business in a statement. “We are in regular contact with our negotiating partners, and we will continue to work toward a modernized NAFTA. We will only sign a new NAFTA that is good for Canada and good for the middle class. Canada’s signature is required.”</s>The United States and Mexico have reached a trade agreement, leaving Canada as the odd man out in efforts to revise or replace the North American Free Trade Agreement (NAFTA), according to U.S. President Donald Trump.

The new deal will be called the United States-Mexico Trade Agreement, Trump said Monday.

“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,” Trump said.

“It’s a big day for trade, it’s a big day for our country,” Trump said with reporters present, who were called to the Oval Office to watch as Trump spoke on the telephone with Mexican President Enrique Pena Nieto.

The Mexican leader expressed hope to “renew, modernize and update” NAFTA while Trump’s rhetoric indicated he sees that 24-year-old three-nation deal as dead.

“We’ll have a formal news conference in the not-too-distant future,” about the trade pact, Trump said to Pena Nieto.

“This is something very positive for the United States and Mexico,” Pena Nieto replied, saying he is looking forward to toasting Trump with tequila to celebrate, expressing to his American counterpart that he is “really grateful and greatly recognize and acknowledge your political will in all of this.”

 

 Mexico has agreed to immediately begin purchasing as many agricultural products from the United States as possible, according to Trump.

Pena Nieto leaves office on December 1, turning over the Mexican government to his leftist successor, Andres Manuel Lopez Obrador. That means the clock is ticking to give Mexico’s legislature enough time to ratify it before the change of administration.

Congressional notification expected 

 

 The White House is also expected to formally notify Congress by the end of this week of its intention to sign a new trade agreement within 90 days.

“It will be likely be signed at the end of November,” said U.S. Trade Representative Robert Lighthizer, who was also in the Oval Office, along with Mexico’s foreign and trade ministers, for the Trump-Pena Nieto phone call.

The U.S. president, since the time of his 2016 election campaign has referred to NAFTA as the worst trade deal in history and repeated especially inflammatory rhetoric about America’s southern neighbor.

Trump, who blames NAFTA for the destruction of manufacturing jobs in the United States, repeatedly threatened to abandon the trade pact with Canada and Mexico, which came into effect during the Clinton administration in 1994.

Trump has rejected other multi-national deals, such as the Trans-Pacific Partnership (another trade pact) and the Paris Agreement on climate change mitigation, expressing a strong preference for one-on-one negotiations on trade and other matters with countries.

Negotiations with Canada 

 

 Trump said he would call Canadian Prime Minister Justin Trudeau soon and that the United States is open to talks with Canada if it is willing to negotiate fairly.

“I’ll be terminating the existing deal,” Trump said in reference to NAFTA.

The U.S. president also threatened America’s northern neighbor with penalties if there is no agreement.

“Frankly, a tariff on cars is the much easier way to go,” said Trump.

"We will only sign a new NAFTA that is good for Canada and good for the middle class,” said the Canadian foreign ministry in a statement, indicating Ottawa’s willingness to “continue to work toward a modernized NAFTA.”

 “We hope that Canada can join in now,” Lighthizer subsequently told reporters during a conference call.

 

 White House officials are denying that Monday’s announcement by the presidents of the United States and Mexico was designed to pressure the Canadians.

 

 “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,” a visiting scholar at the Cato Institute, Inu Manak, who focuses on trade conflicts, tells VOA News. “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 three North American countries do about $1 trillion in trade among themselves annually.</s>WASHINGTON – The White House says President Donald Trump will make an Oval Office announcement about trade on Monday morning amid reports that negotiators for the U.S. and Mexico have reached a partial deal to revise parts of the North American Free Trade Agreement.

“A big deal looking good with Mexico!” Trump wrote on Twitter.

The pending announcement of a deal comes after five consecutive weeks of talks between the two nations to revise key parts of the 24-year-old pact, which Trump has repeatedly denigrated as the “worst trade deal ever.”

The flags of Canada, the United States and Mexico at NAFTA talks in 2016 in Washington.

But the fate of any new deal will hinge on Canada, which has been on the sidelines during the latest round of negotiations but still must sign off on any changes to NAFTA.

The U.S. and Mexico are hoping to get a final deal signed before Mexican President Enrique Peña Nieto leaves office on Dec. 1.

For that to happen, a trilateral agreement involving Canada will have to be struck before the end of the month in order for the Trump administration to give the required 90 days’ notice to Congress before a deal can be signed.

Negotiators the U.S. and Mexico have been working for weeks to iron out differences between those two countries before Canada is brought back to the table.

One of the key sticking points in the talks has centered on the so-called auto rules of origin, which dictate that, to avoid tariffs, a certain percentage of an automobile must be built from parts that originated from countries within the NAFTA region.

Other stumbling blocks have included the procedure used to settle disputes between corporations and governments and the Trump administration’s push for the inclusion of a sunset provision under which the revised NAFTA agreement would expire after five years unless all three countries take steps to extend it.

Mexico and Canada have both balked at such a provision, arguing that trade agreements are supposed to offer the assurance of continuity for businesses and make it easier for them to comply with regulatory requirements.

More: What is NAFTA? Seven things to know about the North American free trade pact

More: U.S.-Mexico are close to reaching a deal in NAFTA talks, but Canada is still a wild card</s>WASHINGTON (AP) — President Donald Trump says he intends to terminate the North American Free Trade Agreement and call its replacement “the United States-Mexico Trade Agreement” — a name that would exclude the third NAFTA partner, Canada.

Trump made the comments after announcing an “understanding” with Mexico that could lead to an overhaul of the 24-year-old trade pact, which Trump has called a job-killing “disaster.” Details of the U.S.-Mexico agreement were expected to be unveiled later Monday.

The president says he will be calling Canadian Prime Minister Justin Trudeau. Trump says, “If they’d like to negotiate fairly, we’ll do that.”

He also threatened to tax Canadian auto imports to increase the pressure on Canada’s government.

“We could have a separate deal (with Canada) or we could put it into this deal,” Trump said.

Trump said Monday during an Oval Office event that he’ll be calling the emerging agreement the “United States-Mexico Trade Agreement.” He says it will mark the end of the NAFTA name.

Mexican President Enrique Pena Nieto was on speakerphone and says he hopes NAFTA partner Canada will eventually be incorporated into the deal.

Adam Austen, a spokesman for the Canadian Foreign Minister, says Canada had been in regular contact with the NAFTA negotiators.

“We will only sign a new NAFTA that is good for Canada and good for the middle class,” said Austen. “Canada’s signature is required.”</s>Donald Trump said on Monday that the United States and Mexico had reached a trade agreement, but that it would not be referred to as the North American Free Trade Agreement (NAFTA).

"They used to call it NAFTA, we’re going to call it the United States-Mexico trade agreement and we’ll get rid of the name NAFTA," Trump told reporters. "It has a bad connotation because the United States was hurt very badly by NAFTA for many years and not it’s a really good deal for both countries."

According to Trump, the new trade deal is very special for manufacturers and farmers.

He also noted that Washington had not started working on a trade agreement with Canada yet, as it wanted to see first if the deal with Mexico was possible.

The US president stressed that he would either impose tariffs on Canadian cars or reach a negotiated deal with the Canadian government.

"I think with Canada, frankly, the easier thing we can do is tariff their cars coming in, it's a tremendous amount of money and it's a very simple negotiation… I think we'll give them a chance to probably have a separate deal or perhaps we'll put it in to this deal," Trump told reporters.

READ MORE: US Relations With Mexico Improving, Big Bilateral Trade Deal Coming — Trump

Canadian officials were motivated by the successful trade talks between the United States and Mexico, which were necessary to renegotiate the North American Trade Agreement (NAFTA), Katie Simpson, a spokesperson for Canada's foreign minister, said on Monday.

"Canada is encouraged by the continued optimism shown by our negotiating partners," Simpson said. "Progress between Mexico and the United States is a necessary requirement for any renewed NAFTA agreement."

In addition, the spokesperson noted that Canada would join the renewed North American Trade Agreement (NAFTA) only if the deal was beneficial for Ottawa.

"We will only sign a new NAFTA that is good for Canada and good for the middle class," the spokesperson said.

NAFTA took effect 24 years ago. Politicians from all three sides had repeatedly called for the agreement to be modernized, as e-commerce and digital services have largely re-shaped the trade patterns that were in place when the deal was signed.</s>President Trump said the United States and Mexico had agreed to revise key parts of the North American Free Trade Agreement and would finalize it within days. His apparent willingness to move on without Canada prompted concern among lawmakers and businesses.

WASHINGTON — President Donald Trump on Monday said the United States and Mexico had reached agreement to revise key portions of the North American Free Trade Agreement and would finalize it within days, suggesting he was ready to jettison Canada from the trilateral trade pact if the country did not get on board quickly.

Speaking from the Oval Office on Monday, Trump touted the preliminary agreement with Mexico as a new trade pact that could replace NAFTA and threatened to hit Canada with auto tariffs if it did not “negotiate fairly.”

“They used to call it NAFTA,” Trump said. “We’re going to call it the United States-Mexico Trade Agreement,” adding that the term NAFTA — which he has called the “worst” trade deal in history — had “a bad connotation” for the United States.

Yet while Trump may want to change the name, the agreement reached with Mexico is simply a revised NAFTA with updates to provisions surrounding the digital economy, automobiles and labor unions. The core of the trade pact — which allows U.S. companies to operate in Mexico and Canada without tariffs — remains intact.

Now, the question becomes whether a trilateral pact becomes a bilateral deal — or if Trump’s threats pressure Canada to return to the negotiating table and accede to many of the United States’ demands.

The president’s apparent willingness to move on without Canada prompted confusion and concern among lawmakers, who said it may not be legally permissible, let alone smart, and businesses whose supply chains depend on a deal encompassing Canada, Mexico and the United States.

“Because of the massive amount of movement of goods between the three countries and the integration of operations which make manufacturing in our country more competitive, it is imperative that a trilateral agreement be inked,” Jay Timmons, president and chief executive of the National Association of Manufacturers, said in a statement.

Mexican officials said Monday that they wanted to have Canada back in the process and were working toward a trilateral deal by the end of the week. Mexican President Enrique Peña Nieto, who joined the White House announcement via phone, said “It is our wish, Mr. President, that now Canada will also be able to be incorporated in all this.”

But later in the day, Luis Videgaray Caso, Mexico’s foreign minister, signaled that Mexico might be willing to move forward without Canada.

“We’ll put all our effort, 24/7, to promote that Canada continues to be a part of this agreement and we work on this extremely hard,” Videgaray told reporters Monday.

Both the Mexicans and Americans have been eager to reach a fully revised NAFTA deal by the end of August, a date that would give the Trump administration enough time to notify Congress that a deal had been finalized and still have that deal be signed by the outgoing Mexican administration of Peña Nieto.

“Ideally we’ll have the Canadians involved,” Robert Lighthizer, the U.S. trade representative, said, adding that the administration planned to officially inform Congress by Friday of its intent to sign a new deal, a step that is required before Congress votes on a trade pact. “If we don’t have Canada involved, we will notify that we have a bilateral agreement that Canada is welcome to join.”

Chrystia Freeland, the Canadian foreign minister, will travel to Washington on Tuesday to continue negotiations, Adam Austen, her spokesman, said Monday.

“We will only sign a new NAFTA that is good for Canada and good for the middle class. Canada’s signature is required,” Austen added.

The revised deal with Mexico makes significant alterations to rules governing automobile manufacturing, in an effort to bring more car production back to the United States from Mexico. Those changes are being watched carefully by the U.S. auto industry, which has expressed concern that the Trump administration’s efforts to rewrite NAFTA could raise prices of U.S.-made cars and trucks. Automakers like General Motors and Ford have set up plants in Canada and Mexico, and U.S. automakers routinely import car parts from other countries.

Under the changes agreed to by Mexico and the United States, car companies would be required to manufacture at least 75 percent of an automobile’s value in North America under the new rules, up from 62.5 percent previously, in order to qualify for NAFTA’s zero tariffs. They will also be required to use more local steel, aluminum and auto parts, and have 40-45 percent of the car made by workers earning at least $16 an hour, a boon to both the United States and Canada and a win for labor unions, which have been among NAFTA’s biggest critics.

“Automakers urge the U.S. and Mexico to quickly re-engage with Canada to continue to build on this progress,” the Alliance of Auto Manufacturers, which represents most carmakers that sell vehicles in the United States, said in a statement. “The industry is hopeful that any changes to NAFTA auto rules of origin continue to strike the right balance by incentivizing production and investment in North America while keeping new vehicles affordable for more Americans.”

In a briefing Monday, administration officials said that the United States and Mexico had also come to an agreement on a controversial “sunset clause,” proposed by the Trump administration, that would cause NAFTA to automatically expire unless the three countries voted to extend it.

The two countries agreed to a review of the trade pact every six years that would extend its lifetime for 16 more years, officials said. That longer time horizon would give lawmakers a chance to review the trade pact’s progress, while also giving businesses certainty for the immediate future.

The countries also came to an agreement that would limit the kinds of legal challenges that investors can currently make against a foreign government under NAFTA. The oil and gas, infrastructure, energy generation and telecom industries are exempted from these more restrictive rules, and will continue under their previous terms, Lighthizer said — a win for those industries.

It is unclear how eager Canada will be to sign on to a deal containing these revisions. But any agreement that does not involve Canada is likely to face legal challenges and intense opposition from Congress, which had granted the Trump administration authority to renegotiate NAFTA as a trilateral deal.

Sen. Orrin Hatch, R-Utah, the chairman of the Senate Finance Committee, said in a statement that improving NAFTA would help U.S. businesses, manufacturers and farmers but that a bilateral deal was not the answer. “To achieve that goal, a final agreement should include Canada,” he said.

“Once again, President Trump is announcing a victory before he has an agreement,” said Rep. Lloyd Doggett, D-Texas. “While avoiding a trade war against Mexico, our #1 Texas trading partner, we cannot secure a complete, improved North American agreement without Canada, our #2 trading partner.”

Sen. Ben Sasse, R-Neb., said “there is reason to worry that this might be a step backward from NAFTA for American families — especially on fundamental issues of presumed expiration of the deal, and empowering government bureaucrats rather than markets to determine the components in cars and other goods.”

Industry groups applauded the progress with Mexico but also said a final agreement must include Canada.

“Coming to terms with Mexico is an encouraging sign, but threatening to pull out of the existing agreement is not,” said Matthew Shay, CEO of the National Retail Federation. “The administration must bring Canada, an essential trading partner, back to the bargaining table and deliver a trilateral deal.”

The president, flanked by advisers including Lighthizer and Jared Kushner, hailed the preliminary agreements as “a big day for our country,” adding that “many people” had thought that no one could make a deal with Mexico.

Peña Nieto, who has at times exchanged harsh words with Trump as the two countries have squabbled over funding for a wall along the border of the two countries, added a moment of praise Monday.

“I recognize your political will,” Peña Nieto said, “and your participation in this.”</s>House Majority Leader Kevin McCarthy said on Sunday a deal with Mexico for revisions to the North American Free Trade Agreement could be reached shortly.

“I think it’d be very soon,” McCarthy, R-Calif., told Maria Bartiromo on “Sunday Morning Futures.” “We’d vote on it in the next Congress.”

He noted the need for a “modernization” of the trade agreement, which was enacted in 1994 under President Bill Clinton. The deal created a trilateral trade bloc between the U.S., Mexico and Canada.

NAFTA has come under fierce scrutiny by President Trump since his time on the campaign trail, even calling the agreement the “worst trade deal ever made.” Attempts to form a new pact faltered numerous times between the three countries, and talks with Mexico have been focused on creating new rules for the auto industry. Trump has argued that lower wages for employees in Mexico have cost jobs at General Motors, Ford and Fiat Chrysler – “The Big Three” – all of which have production sites in Mexico. The president said in June that the deal could remain trilateral or could be renegotiated into two separate arrangements.

Mexico’s Economy Minister Ildefonso Guajardo told reporters on Sunday a deal between the U.S. and Mexico was nearing completion.

“I would say that we're practically in the final hours of this negotiation,” he said while arriving for talks at U.S. Trade Representative Robert Lighthizer’s office in Washington. A few hours later, Guajardo said a deal still had yet to be reached.

In addition to its close ties to the U.S. auto industry, Mexico also has been the top importer of U.S. corn for years and the No. 2 purchaser of American soybeans, though it has recently begun turning to Brazil and Argentina as well as working to increase its own supply. Mexico bought 584,000 metric tons of corn from Brazil last year – a 970% spike over 2016, Reuters reported.
The United States and Mexico reach common ground on key trade terms in the North American Free Trade Agreement. Canada has yet to sign off on the agreement.