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Trump's economic adviser, Larry Kudlow, told reporters the deal with Mexico should serve as a "reset" for talks with Canada.

NAFTA was created 24 years ago, making trade easier between the U.S., Canada and Mexico, but President Trump and other critics say that it has encouraged American manufacturers to move to Mexico because of cheaper labor.

"Let us hope that soon, in equal measure, the same will happen with the negotiation with Canada and the United States that would allow us in the coming days to formally close the Free Trade Agreement - Mexico, the United States and Canada".

All told, Canada undeniably is under pressure to make concessions and get a deal - but Trump's path to barge ahead with just Mexico is not a clear one, either.

Mr Trump has not yet begun negotiating with Canada, but has called on Prime Minister Justin Trudeau to lead negotiations "fairly".

Trudeau spoke with Trump Monday, with the prime minister's office describing it as a "constructive" call.

He said it would be replaced in part by the newly named United States-Mexico Trade Agreement.

He said he wanted to call the revamped trade pact "the United States-Mexico Trade Agreement" because, in his view, NAFTA has earned a reputation for being harmful to American workers.

To break up the current three-country trade agreement, Trump would need approval from Congress, something he is unlikely to get.

Trump made these comments during an oddly riveting televised event from the White House, where he had Mexico's outgoing president, Enrique Peña Nieto, on speakerphone.

Also helping sentiment was news from the White House that U.S. President Donald Trump and German Chancellor Angela Merkel "strongly supported ongoing discussions" on trade. "If not, the United States of America may have to take action".

Although Trump threatened to slap additional tariffs on Canada if it didn't come to terms on a new pact this week, administration officials said the side agreement with Mexico wasn't meant to put pressure on Ottawa. By definition, we buy more from them than they buy from us, which gives us the power any major consumer has over a seller. Because of strong demand in the US, prices for steel produced in the country was up by around 40 percent as early July, according to Global News, a Canadian outlet.

"There are still issues with Canada, but I think they could be resolved very quickly", the official said.

The "US-Mexico Trade Agreement" does not exist - and likely never will.

Representatives of all three parties to the North American Free Trade Agreement had been trying for more than a year to renegotiate the deal.

Negotiations between the United States and China have been stalled since May, when Mr Trump put a stop to a deal for China to buy more energy and agricultural goods to narrow the trade deficit.

Canada, which has not participated in the negotiations in recent weeks, had said the dispute settlement system was a priority.

The U.S. -Mexican deal could pave the way for Canada's return to the continental bargaining table for the first time since trilateral NAFTA talks wrapped up last spring. "Canada's signature is required", he said. It would also require 40% to 45% of the auto to be made by workers earning at least $16 an hour. "Even so, news of the deal still buoyed markets, although the currency market reaction was a little more interesting". Plus, Congress must approve the changes.