WASHINGTON (Pakistan Point News / Sputnik - 28th August, 2018) The United States and Mexico have reached a new trade deal to replace the North American Free Trade Agreement (NAFTA) and expressed hope Canada will join after it conducts additional negotiations with the Trump administration.
The United States and Mexico finalized a trade agreement after a year of negotiations. However, the new agreement will still need to be ratified by Congress before taking effect.
Canada, Mexico and the United States began renegotiating NAFTA a year ago at the request of US President Donald Trump who sought to modernize the agreement and make it fairer for US workers.
Trump has threatened to withdraw the United States from NAFTA if a better agreement is not renegotiated. The agreement has been in place since 1994.
US-MEXICO TRADE DEAL REPLACES NAFTA
Trump announced on Monday that the United States and Mexico have reached a new trade agreement that will replace the current NAFTA pact.
"They used to call it NAFTA, we're going to call it the United States-Mexico trade agreement and we'll get rid of the name NAFTA," Trump told reporters. "It has a bad connotation because the United States was hurt very badly by NAFTA for many years and it's not a really good deal for both countries."
On Monday, a US administration official said in a conference call that the new US-Mexico trade agreement will have a 16-year life span and can be extended after a review period every six-years.
US Secretary of Agriculture Sonny Perdue said in a statement that the agreement is a big win for US farmers because they would benefit from getting access to Mexican markets. In addition, Perdue said the agreement with specifically address agricultural biotechnology that will help stay up to date with respect to innovations.
Perdue emphasized that the United States and Mexico are committed to reducing "trade distorting" policies that make it harder for the countries to engage in bilateral commerce. Moreover, he said both countries will also work to increase transparency and ensure non-discriminatory treatment in grading of agricultural products.
US Vice President Mike Pence said in a statement that the new trade agreement is a win for US manufactures and autoworkers in addition to farmers.
Pence said the new trade deal will maintain duty-free access for agricultural goods from Mexico and the United States and eliminate non-tariff barriers and encourage more agricultural trade between both countries.
The Us vice president also said the agreement strengthens labor standards with requirements that are fully enforceable.
US TO NEGOTIATE NEW DEAL WITH CANADA
Trump said his administration will begin trade talks with Canada immediately, but he also suggested that imposing tariffs on Canadian cars could be a better option.
"I think with Canada, frankly, the easier thing we can do is tariff their cars coming in, it's a tremendous amount of money and it's a very simple negotiation," Trump said. "I think we'll give them a chance to probably have a separate deal or perhaps we'll put it in to this deal."
US Trade Representative Robert Lighthizer told reporters that he is hopeful Canada will join the new trade agreement reached between the United States and Mexico.
In addition, Perdue said he is hopeful that Canada would continue to discuss the current trade issues and come to an agreement with the United States and Mexico in order to restore the original trade trio.
Earlier on Monday, a spokesperson for Canada's Foreign Minister Chrystia Freeland, Katie Simpson, said in a statement that Ottawa would sign the new agreement on trade only if it is beneficial for Canada.
US Republican Senator John Cornyn emphasized in a statement the need to ensure that Canada joins the final trade agreement and that everything is done right because millions of jobs in his home state of Texas depend on an update of NAFTA.
"This is a positive step, and now we need to ensure the final agreement brings Canada in to the fold and has bipartisan support...Millions of jobs in Texas depend on an updates NAFTA, and it's important that we get this right," Cornyn said.
US Congressman Don Beyer expressed concern on Twitter over Trump's intentions to terminate NAFTA considering Canada is the biggest export market of his home state of Virginia.
