US president Donald Trump today said the US has reached a preliminary agreement to create a new bilateral trade agreement with Mexico and vowed to terminate the three-way North American Free Trade Agreement (Nafta) that includes Canada.
Calling the deal the "United States-Mexico Trade Agreement," Trump said he would call Canadian prime minister Justin Trudeau and relaunch negotiations with Ottawa. But he threatened to slap tariffs on Canadian autos if the talks with Trudeau's government do not progress.
Trump, during a televised phone call with Mexican President Enrique Pena Nieto, called his bilateral deal with Mexico a "really good agreement" that would be welcomed by US manufacturers and farmers.
But he struck a much more belligerent tone with Canada, saying the US will not tolerate Canada's duties on dairy products.
"The easiest thing we can do is tariff their cars coming in," Trump said. "It's a tremendous amount of money. And it is a very simple negotiation that could end in one day."
Pena Nieto today repeatedly called for the reintegration of Canada into the talks. He said he spoke to Canadian Prime Minister Justin Trudeau yesterday, and expects to "conclude a trilateral negotiation this week."
Canada sat out of recent talks but Trump said negotiations would start "pretty much immediately," either to incorporate Canada into a trilateral agreement with Mexico, or to sign a separate bilateral agreement.
"Progress between the US and Mexico is a necessary requirement for any renewed Nafta agreement," a representative for Canadian foreign minister Chrystia Freeland tweeted. "Canada's signature is required."
Renegotiation of the Nafta treaty was one of Trump's key campaign promises, with rules of origin for car manufacturing and assembly a key sticking point in negotiations. Trump has repeatedly said he wants to return vehicle production to the US.
Trump said he wants to dump the name "Nafta," saying the term "has a lot of bad connotations" for the US "because it was a rip-off."
The US administration plans to send information to Congress about the deal by the end of the week.
Mexican president-elect Andres Manuel Lopez Obrador has worked together with Pena Nieto's team on the agreement, settling any fears that the year-long negotiations will be undone when he takes office on 1 December.
