The United States and Mexico have reached a bilateral trade understanding that could lead to an overhaul of the three-country North American Free Trade Agreement and opens the door for continental talks with Canada.
President Donald Trump who made the announcement on Monday from the White House said that 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.
“It’s an incredible deal for both parties,” said Trump, who also indicated that he would get rid of the name NAFTA as it has a “bad connotation because the United States was hurt very badly by NAFTA,” he added.
According to some media reports, the deal would require 75 per cent of auto content would be made in the United States and Mexico, up from the current level of 62.5 per cent as well, 40 to 45 per cent of that auto content would have to be made by workers earning at least $16 per hour.
However, Canada, which is part of NAFTA, did not participat in the announcement.
According to PresidentTrump, negotiations with Canada were yet to begin.