On Monday, President Donald Trump announced at the White House that his administration has negotiated a reboot of the North American Free Trade Agreement (NAFTA). "They used to call it NAFTA, we're going to call it the United States Mexico Trade Agreement," Trump said. “It’s a big day for trade. It’s a big day for our country. A lot of people felt we’d never get here.” In a conference call with Mexican President Enrique Peña Nieto, Trump congratulated the national leader for agreeing to the deal. "It’s been an honor and you’ve been my friend,” Trump told Nieto. "Congratulations."
At the White House, Trump was flanked by Senior Adviser Jared Kushner, Chief of Staff John Kelly, United States Trade Representative Robert Lighthizer, Mexican Foreign Minister Luis Videgaray, and Mexican Economic Minister Ildefonso Guajardo.
In a tweet last week, Trump signaled that a deal was close at hand. He tweeted, “Our relationship with Mexico is getting closer by the hour. 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!”
According to Trump, the U.S. will work in concert with Mexico to negotiate with Canada -- the biggest trading partner of the U.S. "They want to negotiate very badly," Trump said. “One way or another we’ll have a deal with Canada. It’ll either be a tariff on cars or it’ll be a negotiated deal. Frankly, a tariff on cars is a much easier way to go. Perhaps, the other would be much better for Canada.”
"The name NAFTA has a bad connotation because the United States was hurt very badly by NAFTA," Trump said. Congress must still approve the deal.
During the presidential campaign, Trump favored the repeal or renegotiation of NAFTA, which he has argued was “terrible” for the United States. In April, Trump tweeted, “Mexico is making a fortune on NAFTA...They have very strong border laws - ours are pathetic. With all of the money they make from the U.S., hopefully they will stop people from coming through their country and into ours, at least until Congress changes our immigration laws!”
According to a White House statement, the preliminary United States–Mexico Trade Agreement “modernizes and rebalances the trade relationship to reflect the realities of the 21st century.” The administration said that the new agreement will create “reciprocal trade that grows the economy, supports high-paying jobs for American workers, and protects American intellectual property.” Saying that it will benefit farmers, ranchers, workers, and businesses throughout the continent, it said that new “rules of origin” requirements will “incentivize billions a year in vehicle and automobile parts production in the United States” and support “high-wage jobs.”
Other benefits that the Trump administration touted:
“The strongest, fully enforceable labor standards of any trade agreement. New commitments to reduce trade-distorting policies for agricultural goods. Improvements enabling food and agriculture to trade more fairly. Strong and effective intellectual property protections. The strongest disciplines on digital trade of any international agreement. The most robust transparency obligations of any United States trade agreement.”
Following the announcement of the deal, the Dow Jones Industrial Average rose by 260 points. The Nasdaq Composite rose 1 percent to a record high, breaking above 8,000 points for the first time. Also, the S&P 500 gained 0.8 percent to hit a record high. with materials and financials as the best-performing sectors.