President Trump speaks on a conference call with Mexican President Enrique Pena Nieto as Trump announces a revised trade deal with Mexico. ...
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| President Trump speaks on a conference call with Mexican President Enrique Pena Nieto as Trump announces a revised trade deal with Mexico. Photo by Kevin Dietsch/UPI |
By Ed Adamczyk and Danielle Haynes, UPI
President Donald Trump announced the completion of a preliminary trade agreement between the United States and Mexico on Monday, but threatened new tariffs on Canada if it didn't cooperate in his efforts to renegotiate the North American Free Trade Agreement.
Trump said he plans to terminate NAFTA, saying the name has a "bad connotation," and referred to the new agreement with Mexico as the U.S.-Mexico Free Trade Agreement.
"It's a big day for trade. A big day for our country. A lot of people felt we'd never get here," the U.S. president said during the announcement from the Oval Office.
Any revisions to NAFTA require congressional approval. U.S. Trade Representative Robert Lighthizer said a letter would be sent to Congress by the end of the week, at which point it has 90 days to make revisions and give approval.
Trump has long criticized NAFTA for its imbalances, calling it a "terrible deal" during a speech Friday at the Ohio Republican Party state dinner.
"You go up to New England, you go up to parts of Ohio and other places, and you'll see factories that ... left many years ago because of NAFTA," he said. "We're going to either make it good or we're not going to have it."
Negotiations for the new agreement with Mexico centered on auto manufacturing, labor standards, agricultural trade and intellectual property and digital trade.
Canada was absent from the discussions and Ottawa indicated it's in no hurry to renegotiate the pact or to agree to anything not in its favor. Trump said negotiations with Canada will start soon or the United States would add additional tariffs on Canadian imports.
"One way or another, we'll have a deal with Canada. It'll either be a tariff on cars or it'll be a negotiated deal," Trump said Monday. "Frankly, tariff on cars is a much easier way to go. Perhaps, the other would be much better for Canada."
During the brief announcement, Trump spoke by telephone with Mexican President Enrique Peña Nieto, who offered congratulations on the new pact and expressed his desire for Canada to be incorporated into the agreement.
"We see the agreement announced today as positive progress ... in the coming days we will continue in trilateral negotiations with Canada, which is vital to be able to renew the pact," said Marcelo Ebrard, President-elect Andres Manuel Lopez Obrador's pick for foreign minister.
Trump has pressed for changes to the rules involving auto manufacturing in an effort to bring more production jobs to the United States. The plan calls for increased regional content for autos. At least 75 percent of an automobile's value must be made in North America, up from 62.5 percent previously, to qualify for zero tariffs. Use of more local steel, aluminum and auto parts will be required, and a certain proportion of the vehicle must be made by workers earning at least $16 per hour.
The deal also would reduce trade-distorting policies for agricultural products and enable food to be traded more fairly.
"Our farmers are going to be so happy," Trump said. "You know, ... the farmers have stuck with me; I said we were going to do this. And Mexico has promised to immediately start purchasing as much farm product as they can."
Rep. Beto O'Rourke, D-Texas, though, said that ditching NAFTA would have the opposite impact on farmers.
"Terminating NAFTA will have a real-life, long-lasting impact on farmers, ranchers, manufacturers, energy producers, small business owners in Texas," he tweeted. "It generates $112 billion in exports for our state annually with 1 million jobs in our state connected to trade with Mexico alone."
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