Trump announces separate U.S.-Mexico trade agreement, says Canada may join later

President Trump announced Monday that the United States has reached agreement with Mexico on a new trade deal that he declared will not be called NAFTA — a name he said has bad connotations.

Canada might or might not be part of the new deal, Trump said — a startling suggestion that would represent the biggest change yet in U.S. trade policy under the Trump administration, if Trump indeed rips up the North American Free Trade Agreement and replaces it with a bilateral deal with Mexico.

The agreement reached Monday was narrowly focused on auto manufacturing. But the president said that the limited agreement with Mexico could supplant NAFTA.

“We will only sign a new NAFTA that is good for Canada and good for the middle class,” the spokesman said. “Canada’s signature is required.”

If Canada doesn’t sign off, it is unclear what Trump might do, as he has threatened to try to cancel the entire trade pact.

But if Canada does agree to a new deal, it would allow Trump to officially notify Congress that a deal had been reached, starting a 90-day clock under the rules governing the American president’s trade negotiating authority and allowing Peña Nieto to sign the deal before his successor, Andrés Manuel López Obrador, takes office Dec. 1.

López Obrador has been supportive of the negotiations but would be likely to seek changes if the treaty is not completed before he assumes the presidency.

Even if Trump cuts a final deal with Mexico and Canada, Congress will likely have to vote to approve any changes.

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