Big oil calls proposed NAFTA agreement with Mexico encouraging

Ildefonso Guajardo at a news conference in Mexico City

Ildefonso Guajardo at a news in Mexico City

"If Canada is not in then we'll notify that we have an agreement with Mexico and we are open to Canada joining it", the official said.

Judging by initial reports about the revised agreement with Mexico, which focused heavily on auto manufacturing, Trump and his hard-line nationalist trade representative, Robert Lighthizer, got a good deal of what they wanted.

The United States and Mexico have reportedly reached a preliminary agreement to revise parts of the North American Free Trade Agreement.

The BIS report found Canada would be the biggest loser if trade talks falter, in large part because of vulnerability to USA tariffs on vehicles and auto parts made in Canada. The Trump administration is also seeking a sunset clause that would end the pact after five years, unless the three countries explicitly agree to continue it.

The countries are said to have agreed that carmakers who do not comply with the new Nafta rules will pay a 2.5 per cent tariff, the same as they would if they skirted the existing Nafta, while any new Mexican plants would not have a guarantee.

Under NAFTA, Trump needs to give six months notice before terminating the 24-year-old agreement.

Trump has also said this is not the right time to talk to China about trade, but eventually, it will be the right time.

"We've made a deal with Mexico, and we'll get started with Canada "immediately", Trump said".

Trump used his announcement on Monday to gripe about Canadian tariffs on American dairy products.

Trump has pressed for changes to the rules involving auto manufacturing in an effort to bring more production jobs to the United States. He long has said he favors trade pacts only between Washington and one other country. Canada will now need to rejoin talks - the USA hadn't invited them for weeks - and sign off on the deal, as well as resolve its own irritants. If the U.S.is able to reach a deal with Mexico first, the Trump administration could strong-arm Canada into a disadvantageous deal.

On Saturday, Seade told reporters that the nations have resolved concerns that the deal had too many restrictions on how the next government can treat foreign oil companies investing in Mexico. A month ago, representatives from both the US and Mexico returned to the table after Mexico's elections forced a two-month hiatus on negotiations. "I think NAFTA has a lot of bad connotations for the United States because it was a rip off". Because we all negotiate tough.

"Now it's a really good deal for both countries and we look very much forward to it and I believe the president is on the phone". The call finally was connected.

That could potentially expose them to U.S auto tariffs of between 20 per cent and 25 per cent, which Trump is considering under national security grounds.

The Trump administration said the deal improves labor provisions. "It's not part of the strategy or anything".

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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