A New Trade Deal

August 29, 2018
Rebecca Mordechai with AP reporting
REWRITING NAFTA President Donald Trump speaks with Mexico’s President Enrique Peña Nieto by phone on Monday, during a press conference about the North American Free Trade Agreement.
SIPA USA/AP IMAGES

President Donald Trump is working to renegotiate the North American Free Trade Agreement (NAFTA).

NAFTA is a trade agreement between Canada, Mexico, and the United States. It took effect in 1994. NAFTA allows for free trade in North America. It eliminates almost all taxes on imports and exports among the three countries.

But Trump believes the trade agreement has led to the loss of American jobs. The Trump administration has been working with Mexican officials to revise NAFTA.

Canada has not been part of these negotiations. The country has not been willing to accept U.S. trade demands. In June, Canadian president Justin Trudeau said he would not let Canada be pushed around by the U.S. “Canada was happy with the status quo,” Christopher Sands told the Associated Press. He is the director of Johns Hopkins University’s Center for Canadian Studies.

On Monday, Trump threatened to place a tax on automobile imports from Canada if the country does not negotiate.

Chrystia Freeland, Canada’s foreign affairs minister, traveled to Washington to be part of talks. On Tuesday, she met with U.S. trade representative Robert Lighthizer. The two discussed how Canada can be included in the revised agreement. Freeland said they had “a very good, constructive conversation.”

Steven Mnuchin is the U.S. treasury secretary. He is optimistic about Canada’s inclusion in a new NAFTA deal. Mnuchin told CNBC, “Our objective is to get Canada on board quickly.”