NAFTA is being renamed US-Mexico Trade Agreement, President Trump says

Trump terminating NAFTA negotiating with Canada

Trump terminating NAFTA negotiating with Canada

Mr Trump said the deal struck with Mexico was a "really good agreement for both countries" and that it would be called the US-Mexico trade agreement.

Although the deal will not be finalized immediately, the progress in negotiations comes as a relief to USA businesses that find themselves in the middle of trade wars with Mexico, Canada, China and the European Union, The New York Times reported. In response, Mexico slapped tariffs on $3 billion of US goods, including steel, pork, apples, potatoes, bourbon and different types of cheese.

"Canada is encouraged by the continued optimism shown by our negotiating partners", said a spokesperson for Canadian Minister of Foreign Affairs Chrystia Freeland.

But Trump has called the agreement "the worst deal maybe ever signed" and moved ahead with tariffs earlier this year.

Trump is expected to send formal notice to the U.S. Congress by the end of the week about his intentions to sign a new trade agreement within 90 days, which would give Mexico's Pena Nieto time to sign it before he leaves office, the senior U.S. trade official said.

The US presidents said he meant to terminate NAFTA while he pursues trade deals with Mexico and starts negotiations with Canada.

The United States, Mexico and Canada do more than 1 trillion dollars in trade between them every year. Trump says negotiations with Canada have yet to begin and is calling on the country to negotiate fairly.

Once they reach an agreement, the third country in NAFTA - Canada - would be brought back in to finalize a revamp of the 24-year-old pact.

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The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA), putting pressure on Canada to agree to the new terms on auto trade and other issues to remain part of the three-nation pact.

The White House said it planned an announcement on trade later Monday morning.

"Canada's signature is required" on any modifications to NAFTA, Austen added. But the countries still must resolve hard issues, including USA complaints about Canada's protection for its dairy farmers and the way disputes are resolved under NAFTA.

Austen said the Canadians had been regular contact with the NAFTA negotiators.

He said it would be replaced in part by the newly named United States-Mexico Trade Agreement.

"Millions of jobs in Texas depend on an updated NAFTA, and it's important that we get this right", said Senator John Cornyn, the No. 2 Senate Republican.

NAFTA reduced most trade barriers between the three countries. But Trump and other critics say it encouraged US manufacturers to move south of the border to exploit low-wage Mexican labor.

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