The United States and Mexico have reached agreement to revise key portions of the 24-year-old North American Free Trade Agreement (NAFTA) and a preliminary deal could be announced today (Aug. 27), a crucial step toward revamping a trade pact that has appeared on the brink of collapse during the past year of negotiations.

As reported by the New York Times, reaching an agreement on how to revise some of the most contentious portions of what President Trump has long called the worst trade pact in history would give him a significant win in a trade war he has started with countries around the globe, including Mexico, Canada, the European Union and China.

Still, a preliminary agreement between the United States and Mexico would fall far short of actually revising NAFTA. The preliminary agreement still excludes Canada, which is also a party to NAFTA but has been absent from talks held in Washington in recent weeks.

The agreement with Mexico centers on rules governing the automobile industry, resolving a big source of friction, but leaves aside other contentious issues that affect all three countries.

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