Trump Hints US and Mexico on Verge of Trade Agreement Amid NAFTA Renegotiation

Washington: Donald Trump on Saturday hinted that the US and Mexico were on the verge of finalising a deal, as negotiators from both sides were holding talks through the weekend to revamp the North American Free Trade Agreement.

The trilateral treaty has been a key target in the US president's aggressive trade strategy and he has repeatedly threatened to scrap it altogether.

But after a year of intense negotiations aimed at salvaging the pact, the US and Mexico now appear to be close to a point where Canada can rejoin the talks.

"Our relationship with Mexico is getting closer by the hour," Trump tweeted.

"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!" His tweet followed a similarly optimistic message from Mexico's Economy Minister Ildefonso Guajardo, who said on Friday that bilateral meetings with the US were "very far" along.

Guajardo and Mexico's Foreign Minister Luis Videgaray have been shuttling back and forth to Washington for more than a month for meetings with US Trade Representative Robert Lighthizer to try to iron out major bilateral stumbling blocks, such as rules for the auto market, before the end of August.

Foreign Minister Chrystia Freeland of Canada — the third party to the trade pact — said earlier in the week that she was encouraged by the progress between Washington and Mexico City and would rejoin the talks once the bilateral discussions concluded. Guajardo declined to go into detail on the topics remaining with the United States but said the agreement could happen at any time.

"The idea is that we are staying because we know there are issues to resolve," he said. "And we have to make sure that everybody feels comfortable with this agreement."

A contentious "sunset" proposal by the United States — to require that the nearly 25-year-old trade pact be reauthorised every five years — is one that must include all three partners, Guajardo said. Jesus Seade, an economic advisor to Mexico's incoming president, Andres Manuel Lopez Obrador, has been participating in portions of the NAFTA talks and said the sunset clause "is going out," according to press reports from Mexico City.

The United States and Mexico are keen to seal a new deal before Mexican President Enrique Pena Nieto hands over power to Lopez Obrador on December 1, and for that to happen, the US Congress must be notified 90 days in advance.

The three countries have been negotiating for a year to save the free-trade agreement that Trump has previously referred to as a "disaster." NAFTA has been in effect almost 25 years. Guajardo and Lighthizer began meeting at the end of July after negotiations between the three partners stalled in May.