The US and Mexico have reached an “understanding” on trade that could lead to an overhaul of the North American Free Trade Agreement (Nafta), Donald Trump has announced.
In a special address from the Oval Office, the US president, who was joined by Mexican President Enrique Pena Nieto via speakerphone, called the agreement “an incredible deal for both parties”.
“Despite Trump’s oftentimes contentious relationship with Mexico, his administration and that of outgoing Mexican President Enrique Pena Nieto have been working for the past five weeks to iron out their bilateral differences”, says Fox News, which claims both countries want to finalise an agreement this month so that it can be signed ahead of Mexican President-elect Andres Manuel Lopez Obrador’s inauguration in December.
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According to various reports, US and Mexican negotiators worked through the weekend to resolve key differences on a number of issues, ranging from automobiles to energy.
Many of the most significant changes agreed to by Mexico and the US, however, simply update the pact to take into account the rise of the internet and the digital economy since the agreement was negotiated 25 years ago.
Before the announcement, the New York Times said reaching an agreement on how to revise some of the most contentious portions of what President 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”.
Despite the breakthrough, however, a preliminary agreement between the US and Mexico “would fall far short of actually revising Nafta” says the paper, as it excludes Canada who have taken a back seat in the negotiations in recent weeks.
The agreement between Mexico and the US does though now “open the door for Canada to return to the negotiations to rework the 1994 trilateral trade deal”, which has been the subject of intense renegotiations for over a year, says Reuters.
Trump used his Oval Office address to call on Canada to negotiate fairly, contrasting sharply with his criticism of Canadian trade practices and a direct threat earlier this year to impose auto tariffs on imports if the two countries could not reach a deal.
