The United States and Mexico have reached a tentative trade deal,... which U.S. President Donald Trump hopes will replace the NAFTA deal which he has frequently criticized as unfair to the U.S.
Ro Aram has the details.
The update announced on Monday focused mainly on the automotive industry.
Provisions include requiring any car sold in North America to be made using parts made at least 75 percent in the U.S. or Mexico
The figure is currently just over 62 percent under NAFTA, and also includes Canada.
The new agreement also seeks to raise labor standards by requiring 40 to 45 percent of auto parts to be made by workers earning at least 16 U.S. dollars an hour.
The provision is designed to discourage carmakers from moving jobs to lower-wage Mexico.
There's also said to be a sunset clause, in which the new agreement will last for 16 years, with a review every six years.
However, all this remains in doubt as a key NAFTA signatory, Canada, is yet to agree on the terms.
In a televised phone call with his Mexican counterpart, President Trump said he may seek a separate trade deal with Canada and even scrap the name NAFTA.
"I like to call this deal the United States-Mexico trade agreement. I think it's an elegant name. I think NAFTA has a lot of bad connotations for the United States because it was a rip off….. We will see whether or not we decide to put up a Canada - or just do a separate deal with Canada if they want to make a deal."
Mexican President Enrique Pena Nieto, however, expressed his desire for Canada to be integrated into the negotiation process.
Trade experts believe that leaving Canada out of the trilateral deal would be damaging to international trade as it could disrupt complex but vital supply chains set up by manufacturers across all three NAFTA borders.
Canada's foreign minister and NAFTA negotiator Chrystia Freeland is cutting short a trip to Europe to fly to Washington on Tuesday to try and restart talks.
Ro Aram, Arirang News.
