27 Aug The White House and Mexico’s President Announce that a Bilateral Trade Agreement has been Reached; Canada Acting Swiftly to Sign-on by the End of this Week
President Trump held a long conversation with Mexican President Pena Nieto this morning in front of reporters assembled in the Oval Office to publicize the deal. Both are very positive at this outcome, that will ensure Mexico will have full access to the U.S. market whilst ensuring fairer trade terms for the U.S.
The deal will change Rules of Origin. 75% of all the parts to build an automobile will need to be sourced in the U.S. and Canada, up from 62.5%, in order to be duty-free. In addition, 45% of the labor involved will need to earn USD16 or higher, a measure aimed at discouraging automobile manufacturing shifting from the U.S. to Mexico. Other U.S. industries that will see benefits include agriculture and textiles.
The Agreement has a lifespan of 16 years, but can be reviewed every six years, and extended for a further 16 years.
The new deal will lead to the termination of NAFTA to be known in future as the United States – Mexico Trade Agreement.
President Pena Nieto speaking this morning, said “I think this is something very positive for the United States and Mexico”.
There is pressure upon Canada to rejoin the process, which will begin on Tuesday, with the objective of concluding a trilateral negotiation this week. Friday is the deadline because the Deal will need to be ratified by Congress beginning September 1st and the process takes three months. Full signatures need to be dry by December 1st, when the President-elect of Mexico, Lopez Obrador, takes office.
ABC will continue to follow developments, as they have been all year, and will provide updates as more information becomes available.