New US-Mexico trade agreement focuses on automobile manufacturing

After months of negotiations, President Donald Trump on Monday announced the United States and Mexico have agreed on revisions to key parts of the North American Free Trade Agreement (NAFTA) — a trade agreement between the United States, Canada and Mexico, ABC News is reporting.

“It’s a big day for trade. It’s a big day for our country,” Trump said.

Trade negotiations with Canada are still ongoing. “We’ll see if Canada can be part of the deal,” he said. Trump cast the agreement as the United States-Mexico Trade Agreement, saying he wanted to do away with the NAFTA name because it had “bad connotations.”

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The agreement between the U.S. and Mexico Monday mostly focuses on automobile manufacturing.

The two main provisions include a requirement that 40-45 percent of all automobile components be made by workers earning $16 or more per hour, aimed at helping the U.S. compete against low wage auto workers abroad, and also new rules requiring a significant portion of automobile parts — 75 percent — be made in the U.S. and Mexico.

“This is going to be a great day for Detroit,” Lighthizer said in a briefing call with reporters.