Trump Announces US-Mexico Trade Agreement As He Terminates NAFTA; Canada Left Out

Monday, August 27, 2018
By Paul Martin

by Tyler Durden
Mon, 08/27/2018

In a hastily arranged Oval Office conference with Mexican President Enrique Pena Nieto joining by speakerphone Trump announced that he is terminating NAFTA as it now stands and entering a different deal with Mexico, and possibly Canada if they want to negotiate “fairly.” If not, Trump will slam tariffs on Canada’s cars.

During the conference, Trump said that: “They used to call it NAFTA, we’re going to call it the ‘United States Mexico Trade Agreement.’ We’ll get rid of the name NAFTA.”

So it’s the USMTA from now on, with a possible expansion to include Canada.

A key provision of the new deal is an increase in the mandated locally-sourced auto content from 62.5% to 75%, and that 40% to 45% of auto content would be made by workers earning average base wage of $16/hour.

Trump called today’s NAFTA revamp “a big day for trade” and said he plans to change the name of a reworked version of the accord.

Nieto said he hoped Canada would soon be incorporated in the revised agreement, while Trump said that remains to be seen. As he announced the move, Trump said he would drop the name Nafta for the trade arrangement because of the bad connotations of a deal that has been criticized as contributing to the flow of jobs from the U.S. to Mexico.

The agreement between the U.S. and Mexico is the biggest development in talks that began a year ago, punctuated by Trump’s repeated threats to quit altogether. Breakthroughs came during the past several days of bilateral talks on automobiles and energy. The three countries trade more than $1 trillion annually, much of it under the pact.

The question remains: what happens to Canada next?

The Rest…HERE

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