Trump's NAFTA facelift would mark an ugly 'win' for America

Evan Vucci  AP

Evan Vucci AP

"We are now inviting the Canadians in as well and hope that we can reach a fair and successful conclusion with them as well", the official told Reuters in an interview.

"We'll get rid of the name NAFTA", Trump said, adding that he would call Canadian Prime Minister Justin Trudeau to begin negotiations with the treaty's third party "very soon".

The sides also agreed that 40-45 percent of cars must be made at "high wage" factories where workers receive $16 an hour in order to receive duty-free treatment, something that could deter off-shoring U.S. auto manufacturing to Mexico. Negotiators also agreed to increase the percentage of vehicles built in factories paying an average wage of at least $16 an hour.

Analysts at ANZ Bank New Zealand, (ANZ), explained that the U.S. and Mexico have reached a trade agreement that will replace a soon-to-be-terminated NAFTA bill, according to both Presidents in a joint announcement. He even added later in the day that he had "just signed a trade agreement with Mexico", which can not happen without the USA first nixing NAFTA. 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.

Democratic Senate Leader Chuck Schumer said a bilateral deal would face "serious legal concerns", while he also questioned a lack of details on the terms of the Mexico pact.

Addressing reporters in the White House Oval Office on Wednesday, Trump praised the preliminary agreement as an "incredible deal" for both countries.

"I think with Canada, frankly, the easiest thing we can do is to tariff their cars coming in". But all three countries need to be part of the deal, he said.

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The president has called NAFTA the worst trade agreement in American history. Congress would then have an additional 90 days to review any new agreements replacing Nafta.

"For more clarity, maybe ask the Mexicans", the official said.

Hugo Perezcano Diaz, former head of global trade for the Ministry of Economy in the Mexican government, told Business Insider in early August he thought a NAFTA deal could be reached in coming months - but games the president is known to play seemed to keep optimism at bay. Mexico and Canada both initially opposed including a sunset provision. "Given the encouraging announcement today of further bilateral progress between the USA and Mexico, Minister Freeland will travel to Washington, D.C., tomorrow to continue negotiations", her spokesman said.

For political reasons in Mexico there is a drive to have a deal signed before the newly elected president takes office, on December 1.

The United States Council for International Business also said it is "troubled" by indications that certain investor protections have been removed or reserved for specific sectors.

In a move which would be unusual for most USA leaders, Mr Trump made a decision to have his phone call congratulating Enrique Pena Nieto recorded live.

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