U.S., Mexico said to reach NAFTA deal as Canada keeps waiting

Donald Trump has signed off on a bilateral agreement with Mexico to revamp the North American Free Trade Agreement, according to three people familiar with the matter, and the president will make a trade announcement shortly...

There is no deal reached yet with Canada, the people said, which has been on the sidelines of the talks since July as Mexico and the U.S focused on settling differences.

It’s the biggest development in talks that began a year ago, punctuated by Trump’s repeated threats to quit altogether. Significant breakthroughs between Mexico and the U.S. came during the past several days on automobiles and energy. The three countries trade more than US$1 trillion annually, much of it under the pact.

While it could be more of a NAFTA tweak than an overhaul, several issues remain to update the 1994 accord. Canada will now need to rejoin talks — the U.S. hadn’t invited them for weeks — and sign off on the deal, as well as resolve its own irritants. Monday’s bilateral agreement and the threat of auto tariffs could pressure Canada, which has warned it won’t rubber stamp anything...

Talks between the U.S. and Mexico had focused largely on cars...

How quickly Canada will rejoin talks remains unclear... Even once Canada agrees, any NAFTA deal between the three countries would have to be ratified. Timelines set out under U.S. trade law mean that would almost certainly be done by the next U.S. Congress, raising the prospect of further hurdles.

This has been excerpted from the 27 August 2018 edition of the Financial Post.