The Canadian dollar was higher by 0.4 per cent against the USA dollar in early afternoon trading Tuesday - at 0.7742 cents US.
But Trump again denounced Canadian dairy import quotas and tariffs and threatened levies on Canadian cars unless the dairy system is dismantled. Shares of Canadian auto parts makers like Magna International Inc. and Linamar Corp. were among those to surge.
"Canada shouldn't have a problem signing on to this", Ashworth said. But the countries still must resolve hard issues, including USA complaints about Canada's protection for its dairy farmers and the way disputes are resolved under NAFTA.
The U.S. -Mexico agreement now includes a six-year mandated review period with Mexico.
For months, the talks were held up by the Trump administration's insistence on a "sunset clause": A renegotiated NAFTA would end after five years unless all three countries agreed to continue it. Mexico and Canada considered that proposal a deal-killer. Canadian Foreign Minister Chrystia Freeland reportedly cut short her diplomatic trip to Europe to go to Washington on Tuesday for trade talks.
Derek Holt, head of capital market economics at Scotiabank, said an apparent resolution of major USA demands on auto tariffs in its agreement with Mexico, addresses the most important sticking points in its negotiations with Canada. "I will terminate the existing deal", Trump replied.
Trump said he was open to including Canada - "if they'd like to negotiate fairly".
But, critically, there's disagreement on whether he can do that without Canada. Clearly, the administration hopes this would keep USA manufacturers from moving south of the border.
Others weren't so sure.
Jesus Seade, Lopez Obrador's designated chief negotiator, told Radio Formula in Mexico City, called the deal "an important first step" and said Lopez Obrador "was very happy" with the results. But "it isn't like Canada is coming in at the last minute", another official said. "It's no longer what the United States was putting first in any way."The decades-old trilateral trade agreement has been a frequent target of Trump, who has criticized large trade deficits the US has with Mexico and Canada, as well as the relocation of American jobs and companies".
That doesn't leave Canada off the hook.
"We could have a separate deal, or we could put it into this deal".
"Canada now has to hurriedly work out a deal, hat in hand", Lawler said.
The sticking points include the US proposing to sharply reduce Canada's ability to bid on USA government contracts.
The outstanding issues, however, are well-known. Canada wants to keep them and Lighthizer wants to kill them. That plan was vehemently opposed by Mexico, Canada and the auto industry. He added that he'd call Prime Minister Justin Trudeau "very soon" and start negotiations.
Details of gains and concessions in the deal were only starting to emerge on Monday.
The leaders now "look forward to having their teams engage this week with a view to a successful conclusion of negotiations". The two-country pact waters down a related mechanism, Chapter 11's investor-state dispute settlement panels, that Canada may also squirm over.
USA law requires a three-month waiting period after a deal is completed before Congress can ratify it. Mexico will swear in its incoming president, Andrés Manuel López Obrador, on December 1.