US and Mexico near deal that would set path for NAFTA revamp

WASHINGTON — U.S. and Mexican negotiators were preparing Monday to announce a deal that would set the stage for an overhaul of the North American Free Trade Agreement.

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

U.S. Trade Rep. Robert Lightizer and Mexican Secretary of Economy Idelfonso Guajardo walked together into the White House without talking to reporters. The delegation also included Jesus Seade, a World Trade Organization veteran tapped by Mexican President-elect Andres Manuel Lopez Obrador as his future chief trade negotiator.

"A big deal looking good with Mexico!" President Trump tweeted Monday morning. Earlier, Guajardo told reporters, "There is one very important issue to finish."

U.S. and Mexican negotiators worked over the weekend to narrow their differences.

"There likely will be a deal today," said Daniel Ujczo, a trade attorney with Dickinson Wright PLLC who has followed the NAFTA talks closely.

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. But the countries still must resolve difficult issues, including U.S. complaints about Canada's protection for its dairy farmers and the way disputes are resolved under NAFTA.

Adam Austen, a spokesman for Canadian Foreign Minister Chrystia Freeland, said: "Canada is encouraged by the continued optimism shown by our negotiating partners. Progress between Mexico and the United States is a necessary requirement for any renewed NAFTA agreement."

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

"We will only sign a new NAFTA that is good for Canada and good for the middle class," he said, adding that "Canada's signature is required."

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

Talks to overhaul the agreement began a year ago and have proven contentious.The Trump administration wants a higher percentage of auto production to come from within the NAFTA bloc before qualifying for duty-free status.

Talks have also been stymied by the Trump administration's insistence on a "sunset clause" that would end NAFTA in five years unless all three countries agreed to continue it.