Trump proposes new trade deal with Mexico - FOX34 Lubbock

Trump proposes new trade deal with Mexico

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LUBBOCK, Texas -

President Trump said he plans to dismantle NAFTA and draft a new trade agreement with Mexico simply; The United States-Mexico Trade Agreement. This agreement intends to resolve key bilateral trade issues and would eliminate the current North American Free Trade Agreement.

"This is something that's very special for our manufacturers, and for our farmers, from both countries for all of the people that work for jobs," said president Trump. "It's also great trade and it makes it a much more fair bill."

The agreement fails to include Canada. 

"I'll be calling the prime minister very soon and we'll start negotiation," said Trump. "If they'd like to negotiate fairly we'll do that. You know they have a tariff of almost 300 percent on some of our dairy products. We can't have that. We're not going to stand for that."

The president calls it one of the largest trade agreements ever made, however this preliminary trade agreement could have negative effects.

"This is a step back from a trade deal this is actually increasing tariffs that weren't there previously," said Michael Noel, associate professor of economics at Texas Tech. "So while it may benefit those who are thinking of a career in manufacturing auto parts, it's actually not good for anyone else including the automobile companies."

The deal focuses on incentivizing manufacturers to source goods and materials in North America, namely 75% the cars covered in the agreement must be made in the U.S. or Mexico.

The U.S. and Mexico are eager to reach a revised NAFTA deal by the end of August, that's the latest Mexican president Enrique Peña Nieto can sign it. After that president elect Andrés Manuel López Obrador will likely try to change it. President Trump has made it clear that he is open to negotiating trade deals with Mexico and Canada separately while both countries have said they want to keep the trade deal from 1994.

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