US and Mexico agree to preliminary Nafta deal

[WASHINGTON] The United States and Mexico have reached agreement to revise key portions of the 24-year-old North American Free Trade Agreement and a preliminary deal could be announced Monday, a crucial step toward revamping a trade pact that has appeared on the brink of collapse during the past year of negotiations.

Reaching an agreement on how to revise some of the most contentious portions of what President Donald Trump has long called the worst trade pact in history would give Mr Trump a significant win in a trade war he has started with countries around the globe, including Mexico, Canada, the European Union and China.

Still, a preliminary agreement between the United States and Mexico would fall far short of actually revising Nafta. The preliminary agreement still excludes Canada, which is also a party to Nafta but has been absent from talks held in Washington in recent weeks.

The agreement with Mexico centers on rules governing the automobile industry, resolving a big source of friction, but leaves aside other contentious issues that affect all three countries.

The revised Nafta would also need congressional approval before it can go into effect, including votes by Republican lawmakers who have criticized some of the president's plans for remaking the deal.

On Monday morning, Mr Trump tweeted, "A big deal looking good with Mexico!"

Finalizing a revised Nafta will now hinge on bringing Canada back into the talks. While Canada has not been a party to recent discussions, the potential for a two-country deal appears highly unlikely, given opposition by Mexico, US lawmakers and North American industries whose supply chains rely on all three countries.

On Monday, a spokesman for Canadian Foreign Minister Chrystia Freeland, said that Canada is "encouraged" by progress between Mexico and the United States but that "we will only sign a new Nafta that is good for Canada and good for the middle class."

Many of the most significant changes agreed to by Mexico and the United States simply update the pact to take into account the rise of the internet and the digital economy since the agreement was negotiated. But Mr Trump's advisers have also pressed for big alterations to the rules governing automobile manufacturing, in an effort to bring more car production back to the United States from Mexico.

NYTimes