President Donald Trump on Monday announced that his administration and the Mexican government have reached a preliminary trade agreement between the United States and Mexico that would replace the countries’ trade relationship under North American Free Trade Agreement (NAFTA).
“It’s a big day for trade, a big day for our country,” he said.
NAFTA, a trade agreement between Canada, Mexico and the Unites States came into force on Jan. 1, 1994. Supporters of NAFTA said it would eliminate trade barriers between the countries and boost their economies. Critics of NAFTA, including Trump, said it hurt the U.S. economy because it made it easier for manufacturers to move their operations to Mexico to take advantage of lower labor costs and then sell their products back into the United States.
No details of the new deal were released today and any new trade deal would require the approval of Congress.
Trump said the new deal with Mexico would create more reciprocal trade between the two countries.
“They used to call it NAFTA,” Trump said. “We’re going to call it the United States-Mexico Trade Agreement, and we’ll get rid of the name NAFTA. It has a bad connotation because the United States was hurt very badly by NAFTA for many years. And now it’s a really good deal for both countries, and we look very much forward to it.”
Trump spoke to Mexican President Enrique Pena Nieto about the deal in a phone call today in front of reporters in the Oval Office.
“I think this is something very positive for the United States and Mexico,” Pena Nieto said. “The first reason for this call, Mr. President, is, first of all, to celebrate the understanding we have had between both negotiating peace on NAFTA, in the interest we have had for quite a few months now to renew it, to modernize it, to update it, and to generate a framework that will boost and potentiate productivity in North America.”
“This is something that’s very special for our manufacturers and for our farmers from both countries, for all of the people that work for jobs,” Trump said. “It’s also great trade and it makes it a much more fair bill. And we are very, very excited about it.”
Trump said he wants to also negotiate a new trade agreement with Canada.
“As far Canada is concerned, we haven’t started with Canada yet. We wanted to do Mexico and see if that was possible to do,” he said. “Canada will start negotiations shortly. I’ll be calling the Prime Minister very soon. And we’ll start negotiation, and if they’d like to negotiate fairly, we’ll do that. You know, they have tariffs of almost 300 percent on some of our dairy products, and we can’t have that. We’re not going to stand for that. I think with Canada, frankly, the easiest thing we can do is to tariff their cars coming in. It’s a tremendous amount of money and it’s a very simple negotiation. It could end in one day and we take in a lot of money the following day. But I think we’ll give them a chance to probably have a separate deal. We can have a separate deal or we can put it into this deal.”
Trump said he also plans work out trade deals with other countries, including China. Trump has placed tariffs on billions of dollars of Chinese goods and China has responded with retaliatory tariffs.
“We’re working very much with other countries,” he said. “China is one; they want to talk. And it’s just not the right time to talk right now, to be honest, with China. It’s been — it’s too one-sided for too many years, for too many decades. And so it’s not the right time to talk. But eventually, I’m sure, that we’ll be able to work out a deal with China. In the meantime, we’re doing very well with China.”
