United States and Mexico reach NAFTA overhaul deal, upping pressure on Canada

Chrystia Freeland gestures during a joint news conference on the closing of the seventh round

The United States relented on its demand for an automatic expiration for the deal, known as a "sunset clause". Volumes above that level would be subject to tariffs, auto industry officials and other sources said.

"It's important that Canada also be included", said the leftist president-elect after the USA and Mexico announced a bilateral deal to update the 25-year-old North American Free Trade Agreement (NAFTA).

"The fact that agreement on those hard issues for Mexico was able to be reached definitely clears the way for us to have significant, substantive, and I hope productive, conversations with the U.S. this week", Freeland said after a brief meeting with U.S. Trade Representative Robert Lighthizer.

Reitzes notes that while the U.S. -Mexico agreement provides some optimism that a deal can be reached with Canada, there is no indication that the Bank of Canada will see this as justifying a rate hike next week.

Serious differences remain on other issues, including the dairy sector, how to settle disputes and a USA proposal for a sunset clause.

Mexico agreed to eliminate dispute settlement panels for certain anti-dumping cases, a move that could complicate talks with Canada, which had insisted on the panels.

According to Green, Lighthizer believed the oil and gas industry was looking for "guarantees" that their investments, especially in Mexico, would be safe and protected by the US government.

Dan Ujczo, a Columbus, Ohio-based trade lawyer who focuses on U.S. "The appearance of Canada as an irrelevant after-thought in NAFTA is a US frame designed exclusively to wrestle concessions from the Canadian side", says Adam Taylor. "So this notion that somehow there has to be a deal by Friday is just wrong, I think".

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The pair were all smiles as they met up with the creative team behind the hit stage show and joined the cast on stage. Meghan's veil was held in place by a diamond and platinum bandeau tiara, lent to her by Her Majesty The Queen.

Mexican Foreign Minister Luis Videgaray told Mexican television on Tuesday the three sides would work for a three-way deal.

Canada has been absent from the NAFTA bargaining table since trilateral talks paused last spring. Both currencies gained against the US dollar on Monday, but the peso weakened on Tuesday.

Details from the Office of the U.S. Trade Representative show the preliminary agreements include a wage provision that 40 to 45 per cent of auto content would be made by workers earning at least US$16 per hour, and increase in the auto content required from the NAFTA region to 75 per cent, up from the current 62.5 per cent.

She declined comment on the issues still in play, but said on Tuesday that Mexico's concessions on auto rules of origin and labor rights had been a breakthrough.

Guajardo said "at the moment" the new rules governing exports of such light vehicles would "kick in" from January 2020. Some lawmakers have said that a bilateral deal would face a higher vote threshold in Congress because the NAFTA fast-track negotiating authority law calls for a trilateral agreement.

Through an interpreter, Pena Nieto reminded Trump four times Monday that he hoped Canada would be part of an eventual trilateral agreement. "We will only sign a new NAFTA that is good for Canada and good for the middle class". Mexico is the third largest USA trading partner.

Trump said he still could put tariffs on Canadian-made cars if Canada did not join its neighbors and warned he expected concessions on Canada's dairy protections. The U.S. president often rails against Canada's system of dairy quotas and tariffs, known as supply management.

There is some urgency as the U.S. seems keen to have the issue resolved before the November midterm elections, and Pena Nieto wants to sign before handing the reins over to Lopez Obrador on December 1.

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