President Trump terminating NAFTA, pursuing separate deal with Mexico

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Your move, Congress: Despite Trump's statement from the Oval Office, he does need Congressional approval to sign onto a new deal.

"I believe the president is on the phone", Trump said, getting no response. This has to do - they used to call it NAFTA.

WASHINGTON-In a major advance in NAFTA negotiations, the US and Mexico have come to a preliminary deal on new North American rules for automotive manufacturing and on other key issues, USA news outlets reported on Monday.

However, the president affirmed negotiations with Canada will begin "very shortly". He says it will mark the end of the NAFTA name.

Mexican President Enrique Pena Nieto has urged Canada to rejoin the talks.

Adam Austen also wrote in an email that Canada would continue to work toward a modernized NAFTA.

Al Jazeera's John Holman, reporting from Mexico City, said outgoing President Nieto "probably had to make sacrifices" to protect a trade agreement with the United States, with a possible effect being the flight of vehicle manufacturing companies from the country.

Industrial companies, banks and big technology stocks are among the biggest winners in midday trading on Wall Street.

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The No. 2 Senate Republican, John Cornyn of Texas, hailed Monday's news as a "positive step" but said Canada needs to be party to a final deal. It's a big day for our country. The mesh of supply chains that have emerged in the 24 years since Nafta first went into effect are staggeringly complex, and disrupting them could cause serious economic damage.

"While higher trade barriers would shield some domestic industries from import competition, the resulting wage gains would be more than offset by the detrimental effects of reduced exportopportunities and the increased costs of imported inputs for manufacturing firms", wrote BIS senior economist, and the report's lead author, Raphael Auer.

The Trump administration said the deal improves labor provisions. That requirement would deter U.S. auto manufacturers from moving production to Mexico, where labor costs are lower, something central to Trump's attacks on NAFTA.

The US trade representative, Robert Lighthizer, and the Mexican secretary of economy, Ildefonso Guajardo, walked together into the White House without talking to reporters on Monday. 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. The Trump administration also wants to eliminate panels to resolve complaints about anti-dumping and countervailing duties.

Prior to Trump's remarks, Canadian Foreign Minister Chrystia Freeland said through a spokesman that "Canada is encouraged by the continued optimism shown by our negotiating partners".

The United States and Mexico have reportedly reached a preliminary agreement to revise parts of the North American Free Trade Agreement. Pena Nieto said on Twitter that he had urged Canada to return to the talks with the aim of concluding a three-nation accord "this week".

"Mr. President, you've been my friend, and you have been somebody that's been very special in a lot of ways, we talked a lot, we talked a lot about this deal, and I'd like to congratulate you and the Mexican people", said President Trump to President Nieto.

Over the weekend, US and Mexican negotiators worked to narrow their differences, capping talks that had begun a year ago and have proved highly contentious.