WASHINGTON — The U.S. and Mexico have struck a trade deal outside of the North American Free Trade Agreement, President Donald Trump said in the Oval Office Monday.
"It's a big day for trade, a big day for our country," Trump said. "We'll get rid of the name NAFTA."
The plan would still have to be approved by Congress to go into effect. Trump said Monday that it remains to be seen whether Canada, which has resisted efforts to rewrite NAFTA, could be included in the new agreement or come to a separate agreement with the U.S.
The deal is a small step in the direction of Trump's promise to use American leverage to force its trading partners across the globe to make new concessions.
It could benefit U.S. energy, agricultural and automotive sectors, Doug Holtz-Eakin, a former chief economist for President George W. Bush's Council of Economic Advisers, said on MSNBC shortly before Trump's announcement.
"If they have a deal that can actually be agreed to by Canada and can be ratified by the Congress, that's an enormous accomplishment — it represents the first time that the president's strategy of using tariffs as a strategic weapon in a trade negotiation actually yielded a result," Holtz-Eakin said, emphasizing that he had said "if."