Canada and the United States reach a deal on NAFTA

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President Donald Trump had threatened to splinter the almost 25-year-old North American Free Trade Agreement into a bilateral pact with Mexico and tax Canadian vehicle exports to the United States if Ottawa had failed to sign on before a midnight Sunday deadline (0400 GMT Monday).

Reaching a pact with Canada allows the 24-year-old pact to remain trilateral and for the U.S. to check another box for its legislative process in the lead up to a congressional vote.

The U.S. senior administration officials told reporters on Sunday night's call that the deal will be signed at end of November and will be submitted to Congress after that for the next Congress at the beginning of 2019. That started a 90-day clock that would let outgoing Mexican President Enrique Pena Nieto sign the new pact before he leaves office December 1.

Negotiators from the three countries began talks about updating NAFTA more than a year ago.

The US and Canada came to an agreement Sunday to tweak key pieces of the North American Free Trade Agreement, known as NAFTA.

Canadian and USA negotiators were racing against a midnight Sunday deadline (0400 GMT Monday) to reach a deal to revamp NAFTA, but thorny issues including Canada's dairy market and US tariffs were still unresolved, a Canadian official and other sources said.

NAFTA tore down most trade barriers between the United States, Canada and Mexico, leading to a surge in trade between the three countries.

The deal is said to involve more U.S. access to Canada's dairy market and a cap on Canada's auto exports to the US. There was no formal agreement on the US's existing steel and aluminum tariffs, according to a senior Trump administration official.

Pierre Lampron, president of Dairy Farmers of Canada, said in a statement.

U.S. President Donald Trump has said he wants to go ahead with a revamped NAFTA - with or without Canada.

Canada, the United States' No. 2 trading partner, was left out when the USA and Mexico reached an agreement last month to revamp the North American Free Trade Agreement.

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According to one high-level American source, the text of the deal was finalized around 9:30 p.m. Sunday, but issues remain around wording.

Any agreement requires the approval of both Trudeau and U.S. President Donald Trump.

Informed sources told The New York Times that Canada will now ease protections on its dairy market and provide access that is similar to what the United States would have gained through the Trans-Pacific Partnership, a trade treaty that Trump withdrew from a year ago.

The executives include two former Canadian ambassadors to the USA who now work for banks: Michael Wilson, chairman of Barclays Capital Canada Inc., and TD chairman Frank McKenna.

Robert Lighthizer, US trade representative, and Chrystia Freeland, Canada's foreign minister, both declared victory.

Mexico agreed to remove NAFTA's Chapter 19, a dispute resolution mechanism for anti-dumping matters, which put Canada in a hard position.

Other top Mexican officials also welcomed the deal.

USA stock index futures rose, with S&P 500 Index e-mini futures up more than 0.5 percent, suggesting the benchmark index would open near a record on Monday.

Reaching a deal would remove a key irritant in the trading relationship between the US and Canada, its top export market.

In addition to opening the door for a NAFTA rewrite, the deal could also ease trade tensions between the USA and Canada over Trump's steel and aluminum tariffs.

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