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Trump has also used Canada as a simplistic political device.

But after a year of intense negotiations to salvage the 25-year-old pact, the United States and Mexico appear close to a point where Canada - which had been waiting for US-Mexican agreement on auto industry rules - can rejoin the talks.

During the announcement, Mr. Trump spoke on speakerphone with Mexico President Enrique Peña Nieto.

Trump understood the simple math that countries with which we have trade deficits would have to come to the negotiating table.

If trilateral talks collapse, Canada would suffer a GDP loss of US$37 billion, compared with US$40 billion in the U.S, and US$22 billion in Mexico, according to the report.

Trump made border security a cornerstone of his campaign for president and has repeatedly threatened to rip up NAFTA, blaming the trade agreement, which came into effect in 1994 while Bill Clinton was president, for the loss of manufacturing jobs in America's Rust Belt.

U.S. Trade Representative Robert Lighthizer said that if finalized and approved by Congress, the new trade agreement with Mexico would take effect in November, after a 90 day waiting period.

Canada and Mexico oppose several USA demands, like a five-year sunset clause.

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For his part, Nieto brought up Canada and his desire to bring Canada in on the deal several times, placing major emphasis on the necessity of their participation.

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.

Foreign Affairs Minister Chrystia Freeland is cutting short a diplomatic trip to Europe to re-enter the high-level talks in Washington on Tuesday. It would also require 40% to 45% of the vehicle to be made by workers earning at least $16 an hour.

Trump tweeted on Monday morning: "A big deal looking good with Mexico!".

Trump said the understanding with Mexico could pave the way for Canada to re-enter talks, saying, "We'll see if Canada can be part of deal". The pact between Canada, the United States, and Mexico commits the three countries to open trade policies.

She now is on a European trip but Guajardo said last week Freeland had indicated she would be available as soon as the United States and Mexico were ready to move to the next phase.

Canada's Foreign Affairs Minister, Chrystia Freeland, said recently she was waiting on the US and Mexico to resolve their differences on automotive rules of origin before returning to the table.

"This is something that is very special for our manufactures and our farmers", Trump said. He then congratulated him on the new deal with the cameras rolling. Other key issues are Chapter 19 anti-dumping panels, which the US wants to kill but which may be a deal-breaker for Canada, as well as Canada's protected dairy sector, which Trump is targeting to dismantle.