U.S. and Mexico reach preliminary NAFTA deal
UPDATE: Since this article was published, USDA Secretary Perdue released a statement on the U.S.-Mexico trade agreement. His comments can be found below.
The U.S. and Mexico have reportedly reached an agreement to revise key portions of the 24-year-old North American Free Trade Agreement (NAFTA) and could announce a preliminary deal on Monday, according to the New York Times.
The renegotiation process was triggered by the U.S. in May last year. Officials from the U.S., Canada and Mexico had originally planned to reach a deal before the Mexican presidential elections in June.
U.S. President Donald Trump has previously labeled NAFTA "the worst trade deal maybe ever" and had pledged to either renegotiate or withdraw the from it.
The news of a preliminary agreement comes days after Reuters reported that the U.S. had dropped a contentious demand to impose seasonal restrictions on Mexican agricultural exports.
A preliminary agreement between the United States and Mexico would fall far short of actually revising NAFTA, the New York Times reported. The preliminary agreement still excludes Canada, which has reportedly been absent from talks held in Washington in recent weeks.
The deal centers on the rules governing the automobile industry and leaves aside other contentious issues that affect all three countries, the publication reported.
The revised NAFTA would also need congressional approval before it can go into effect, including votes by Republican lawmakers who have criticized some of the president’s plans for remaking the deal.
“Our relationship with Mexico is getting closer by the hour,” Trump tweeted on 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!”
Reuters later reported that Canada is encouraged by the continued optimism shown by the U.S. and Mexico and will continue to negotiate for a deal, but will only sign a new agreement that is good for Canada, a spokesman for Foreign Minister Chrystia Freeland.
“Progress between Mexico and the United States is a necessary requirement for any renewed NAFTA agreement. We are in regular contact with our negotiating partners, and we will continue to work toward a modernized NAFTA," spokesman Adam Austen was quoted as saying.
"We will only sign a new NAFTA that is good for Canada and good for the middle class. Canada’s signature is required."
USDA announces deal
U.S. Secretary of Agriculture Sonny Perdue later issued a statement hailing the "breakthrough" agreement.
“The President has achieved important improvements in the agreement to enable our agricultural producers to be treated more fairly," he said.
"This breakthrough demonstrates that the President’s common-sense strategy of holding trading partners accountable will produce results. President Trump and Ambassador Lighthizer, our U.S. Trade Representative, are to be congratulated for their determination, vision, and leadership."
“The agreement specifically addresses agricultural biotechnology to keep up with 21st Century innovations. And we mutually pledge to work together with Mexico to reduce trade-distorting policies, increase transparency, and ensure non-discriminatory treatment in grading of agricultural products.
He went on to describe the development as "nothing short of a great victory for farmers and ranchers", highlighting the importance of locking in U.S. access to the Mexican market.
"Mexico has historically been a great customer and partner and we are happy to have this resolved for our agricultural producers," he said.
“We now hope that Canada will see the need to settle all of the outstanding issues between our two nations as well, and restore us to a true North American Free Trade Agreement.”
CPMA "encouraged" by announcement
The Canadian Produce Marketing Association (CPMA) said it is "encouraged" by the announcement. It added that it was reassured by the Mexican President's "continued reference to including Canada in future discussions and moving towards a new trilateral trade agreement given the integration of trade between NAFTA countries."
"Canadian negotiators have been steadfast in their support for the industry and are well briefed on issues affecting fresh produce, including the seasonality provision, the elimination of Chapter 19, and the sunset clause," it said.
"It is our understanding that the seasonality provision has been removed from the US-Mexico agreement and will not be part of the discussions moving forward. CPMA has long advocated for the removal of the seasonality provision and is pleased that it will not be a feature of a future trilateral agreement.
"CPMA will continue to work with Canadian negotiators as they re-engage in formal negotiations with the U.S. reflecting the need for a trilateral agreement to preserve the competitiveness of the North American fresh fruit and vegetable supply chain."
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