After US-Mexico trade announcement, Washington businesses wonder about Canada

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USA president Donald Trump says he intends to terminate the North American Free Trade Agreement and call its replacement "the United States-Mexico Trade Agreement" - a name that would exclude the third NAFTA partner, Canada.

"We'll get rid of the name NAFTA", Trump said, adding that he would call Canadian Prime Minister Justin Trudeau to begin negotiations with the treaty's third party "very soon".

"The main change - raising the North American regional value content for tariff-free trade in automobiles from 62.5 per cent to 75 per cent - would already be met by nine of 16 vehicle models now produced in Canada".

The new agreement - pending the required signatures - could also change the proportion of a auto that must be made by workers who are paid $16 per hour or more.

If U.S. President Donald Trump becomes "hostile" against Canada as the country seeks a trade deal with its North American counterparts, the economies on both sides of the border would suffer, according to Bruce Heyman, the former U.S. ambassador to Canada.

"We are in regular contact with our negotiating partners, and we will continue to work toward a modernized NAFTA", Austen said.

Trump praised the deal at the White House on Monday, saying the new agreement would be "tremendous" for U.S. farmers and workers.

Donald Trump has announced a trade "understanding" with Mexico which could lead to an overhaul of the 24-year agreement between the two countries and Canada. "Ideally Canada will be in; if not, we will notify Congress of a bilateral trade deal with Mexico".

All told, the deal is not necessarily fatal for the country's prospects of remaining in the trade pact, whatever its new name.

Trudeau spoke to Pena Nieto on Sunday and shared their commitment to reaching a successful conclusion of NAFTA "for all three parties", the prime minister's office said. U.S. automakers recorded even bigger gains.

"The easiest thing that we can do", he said yesterday, "is tariff their cars coming in".

In an interview with BNN Bloomberg, Heyman said there are three possible outcomes as Canada rejoins North American Free Trade Agreement talks.

The US President's promise to make Mexico pay billions of dollars for a wall to stop illegal immigration hasn't been a part of recent conversations between the nations as they worked to update Nafta, he said.

The terms of the U.S. -Mexico deal are still being interpreted and there are many unanswered questions, especially on measures to settle disputes.

Indeed, Mexico has said it wants Canada included in any new deal to replace NAFTA.

The outlines of a NAFTA 2.0 are now on paper, including provisions on auto trade, tougher worker protections and a provision to review the deal every six years.

News of the U.S. -Mexico tentative deal has raised concerns the trade ship has left port, with Canada still at the dock. But suddenly the heat seems to be on to have Canada sign a new NAFTA deal by the end of the week.

What the us and Mexico have agreed to is a "review clause" every six years on an agreement that would be renewed every 16 years.

The president has called NAFTA the worst trade agreement in American history. Brady said he looked forward "to carefully analyzing the details and consulting in the weeks ahead to determine whether the new proposal meets the trade priorities set out by Congress".

Republican lawmaker Kevin Brady, chairman of the tax and trade-focused Ways and Means Committee, called on Canada to return to talks quickly "with the aim of concluding a modern, seamless three-way agreement". It also requires that 75 percent of the parts of cars sold in North America be produced in the U.S. or Mexico.

An official told the paper how Trump 'thought talking about sealing the deal in front of reporters would be not just interesting but important for the American people to see'.