WASHINGTON—In a major advance in NAFTA negotiations, the U.S. and Mexico have come to a preliminary deal on new North American rules for automotive manufacturing and on other key issues, U.S. news outlets reported on Monday.President Donald Trump will make an Oval Office announcement at 11 a.m.A deal would not be a separate trade agreement of the kind Trump has mused about replacing the three-country North American Free Trade Agreement with. Rather, it would be a sub-deal that will now be folded into the ongoing three-country talks over the future of NAFTA.But it would be significant. Though a breakthrough between the U.S. and Mexico would leave complicated NAFTA issues involving Canada unresolved, it would increase the chances that the three countries will eventually reach a final accord to preserve a continental trade pact Trump had repeatedly threatened to terminate.The impasse between the U.S. and Mexico, which had been centred on the auto industry, had slowed the talks for months. The U.S. and Mexico had negotiated one-on-one since July, without Canada at the table, in an attempt to resolve their auto-related disagreements. Canada is now expected to rejoin the talks, likely this week.The deal between the U.S. and Mexico is expected to include several changes the Trump administration believes will help to wrest some car and car-parts manufacturing back to the U.S. from Mexico and from overseas. Trump, like labour unions in the U.S. and Canada, has expressed concern about the NAFTA-era migration of auto jobs to lower-wage Mexico.The deal was expected to include an increase in the minimum percentage of a car or light truck’s content that would have to be made in North America to qualify for tariff-free sales in NAFTA countries; the minimum is 62.5 per cent in the existing NAFTA. The U.S. had also proposed an increase in the minimum percentage of an auto part’s content that would have to be made in North America to qualify for tariff-free sale ...
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