The deal would require 75 per cent of auto content to be made in the Nafta region, up from the current level of 62.5 per cent, a United States trade official said. The preliminary deal also says that 40 to 45 percent of the auto content must be made by workers earning at least $16 an hour.
Investors are betting on a deal materializing soon between Canada and the US, according to analysts, who say the Canadian market will follow its number one trading partner higher, despite the hurdles facing an agreement. "Canada's signature is required", spokesman Adam Austen said.
One piece that may ease tensions with Canada: The U.S. softened its demand for a five-year "sunset clause" requiring the deal to be renewed, a sticking point that led to the stalemate with Canada.
Canadian Foreign Minister Chrystia Freeland gestures during a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico, March 5, 2018. Clearly, the administration hopes this would keep US manufacturers from moving south of the border.
"Canada has still not been made privy to the deal but talks between the US and Canada is expected to start Tuesday (US time)".More news: Samsung has released its the best budget smartphone
Representatives of all three parties to the North American Free Trade Agreement had been trying for more than a year to renegotiate the deal.
Republicans in the US Congress are up for re-election in November, and they want to ensure farmers and other voters - whose jobs depend on trade with Canada and Mexico - that the deal is sealed.
US law requires a three-month waiting period after a deal is completed before Congress can ratify it. Mexico will swear in its incoming president, Andrés Manuel López Obrador, on December 1.
Mexico agreed to eliminate dispute settlement panels for certain anti-dumping cases, a move that could complicate talks with Canada, which had insisted on the panels.
Officials have said that the agreement would remain in force for 16 years, with a review every six. And since the agreement was signed, trade has exploded between the U.S., Mexico, and Canada.
"An agreement, even a limited one, should take some of the uncertainty and animosity out of the bilateral relationship", said Shannon K. O'Neil of the Council on Foreign Relations and author of Two Nations Indivisible: Mexico, the United States and the Road Ahead. But that doesn't do anything to clear up the other sticking points that have clogged NAFTA talks for more than a year, notably including Trump's longstanding demand for better access to Canada for US dairy exports.
"Trump is working straight from his "Art of the Deal" playbook", he said.
And Mexican President-elect Andres Manuel Lopez Obrador called for a three-way trade deal, saying "it's important that Canada also be included".