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Mexico trade deal sparks rally in auto stocks

Mexico trade deal sparks rally in auto stocks

Trump, sitting behind the Resolute Desk in the Oval Office, attempted to take a phone call with Mexican President Enrique Peña Nieto to congratulate him on the agreement.

"As we have said all along, progress between Mexico and the United States is a necessary requirement for any renewed NAFTA agreement", Freeland's spokesman Adam Austen said. Those two facts collided this afternoon during a press spray in the Oval Office when Trump tried to put Mexican President Enrique Peña Nieto on speakerphone while announcing a new trade deal between the USA and Mexico.

Canada, which is a part of NAFTA, was not part of the announcement.

Al Jazeera's John Holman, reporting from Mexico City, said outgoing President Nieto "probably had to make sacrifices" to protect a trade agreement with the U.S., with a possible effect being the flight of vehicle manufacturing companies from the country.

Updated 1:24 p.m. | President Donald Trump on Monday announced a trade deal with Mexico aimed at revamping parts of the North American Free Trade Agreement, but Canadian officials still must sign off on the pact.

The Trump administration said the new "rules of origin" requirements will support billions of dollars in vehicle and parts production in the USA each year.

Canada's NAFTA negotiator, Foreign Minister Chrystia Freeland, is cutting short a trip to Europe to fly to Washington Tuesday to try to restart talks.

But some industry groups said they wanted more clarity on final terms before celebrating the deal. "We'll get rid of the name NAFTA", Trump continued, adding that the name had a "bad connotation".

Any revisions to NAFTA will also require congressional approval, and some Republican legislators have been critical of Trump's plans to reshape the agreement.

The U.S. president also threatened America's northern neighbor with penalties if there is no agreement. Canada and the US are both on the eve of contentious mid-term elections, which could affect the timeline of the negotiations.

"It's hard to have three people all have the light bulb go off at the same time", the official said.

Mr Trump also said that he will "terminate" Nafta in its current form and replace it in with the deal, casting doubt on what role Canada - the third country involved in the original agreement - will play.

Top American and Mexican officials concluded a marathon negotiating session in Washington Monday with an agreement on new content rules for the auto sector and several other bilateral matters that had proven major sticking points in the talks. Even once Canada agrees, any NAFTA deal between the three countries would have to be ratified. However, while the USA and Mexico have reached tentative agreement, they're working under a tight deadline, hoping to have things finalized before Mexican President-elect Andrés Manuel López Obrador is sworn in on December 1. He previously called it a "terrible deal".

With Canadian-U.S.relations at a low after Trump assailed Prime Minister Justin Trudeau in June, the country has withdrawn itself from NAFTA talks in recent weeks.

Companies operating across North America have anxious that some of Trump's demands could hurt the region's economy, especially given the way supply chains and other inter-dependencies between the countries have developed.

That is, if Canada's re-entry into the talks and political posturing do not add new roadblocks to the negotiations.

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