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US, Mexico reach tentative new NAFTA deal, sources say

US, Mexico reach tentative new NAFTA deal, sources say

The United States and Mexico have tentatively agreed to a new deal on the North American Free Trade Agreement, with an announcement expected Monday, Fox News has learned.

President Trump teased a deal in a tweet, saying “A big deal looking good with Mexico!” The White House said the president planned to make a trade announcement from the Oval Office at 11 a.m. ET.

The two countries have been working to resolve key differences on issues ranging from automobiles to energy. Over the weekend, the president said there could be a “big Trade Agreement” soon.

“Our relationship with Mexico is getting closer by the hour,” Trump tweeted Saturday. “Some really good people within both the new and old government, and all working closely together….A big Trade Agreement with Mexico could be happening soon!”

Once they reach an agreement, the third country in NAFTA — Canada — would be brought back in to finalize a revamp of the 24-year-old pact.

Despite Trump’s oftentimes contentious relationship with Mexico, his administration and that of outgoing Mexican President Enrique Peña Nieto have been working for the past five weeks to iron out their bilateral differences so Canada can rejoin the talks to update NAFTA. Both countries want to finalize an agreement this month so that it can be signed ahead of Mexican President-elect Andrés Manuel López Obrador’s inauguration in December.

One of the biggest issues on the negotiating table deals with car manufacturing jobs, as the Trump administration pushes for a deal that would boost factory employment in the U.S.

The U.S. on Thursday agreed to keep the 2.5 percent tariff currently applied under World Trade Organization rules if the cars are made at factories that already exist, which leaves open the possibility that automobiles that are built at new plants could face tariffs of 20 percent to 25 percent.

Trump has also signaled that he is open to negotiating trade deals with Mexico and Canada separately, while both countries have said they want to keep the three-nation trade deal that dates back to 1994.

Earlier in August, Trump threatened Canada with auto tariffs if the U.S. and Canada can’t forge a deal.

"Canada must wait," Trump tweeted. "Their Tariffs and Trade Barriers are far too high. Will tax cars if we can’t make a deal!"

Canada responded with a statement Friday night, saying: "Our focus is unchanged. We’ll keep standing up for Canadian interests as we work toward a modernized trilateral NAFTA agreement."

Adam Austen, a spokesman for Canada’s foreign minister, added: "We’re glad Mexico and the U.S. continue to work out their bilateral issues. It’s the only way we’ll get to a deal."

Fox News’ John Roberts and The Associated Press contributed to this report.

Alex Pappas is a politics reporter at Follow him on Twitter at @AlexPappas.

Published at Mon, 27 Aug 2018 13:53:00 +0000