Shanghai International Shipping Institute

US President Donald Trump says the US and Mexico have agreed on key trade terms that would make for an "incredible" deal that was "much more fair."

Speaking in a televised appearance at the White House on Monday, Mr Trump - a critic of the North American Free Trade Agreement (Nafta) in its present form - announced the apparent breakthrough early this early as pressure intensifies to wrap up renegotiation of the 25-year-old accord, reported the BBC.

The final outcome remains in doubt with Canada, the third country in the agreement.

Mr Trump's threat to exit Nafta triggered a year of talks, after he demanded renegotiation of the 1994 trade agreement, which he blames for a decrease in US manufacturing jobs, particularly in the auto industry.

Negotiators have been rewriting the Nafta treaty over the past year, but Canada has not taken part in the talks over the last five weeks.

"We will see whether or not we decide to put up Canada or just do a separate deal with Canada," Mr Trump said.

He also threatened Canada with tariffs on cars and said he wanted to get rid of the name Nafta, which he said has "bad connotations."

Canadian Prime Minister Justin Trudeau has spoken with Mr Trump since the breakthrough with Mexico was announced.

They "had a constructive conversation" and "look forward to having their teams engage this week with a view to a successful conclusion of negotiations," Mr Trudeau's office said.

Mr Trudeau also spoke to outgoing Mexican President Enrique Pena Nieto on Sunday and the leaders shared their commitment to reaching a successful conclusion of Nafta "for all three parties."

Negotiators want to strike a deal before the newly elected Mexican president, Andres Manuel Lopez Obrador, takes office in December. Mr Obrador has been reluctant to continue Mr Pena Nieto's opening up of Mexico's energy sector, which could complicate negotiations.

In order to meet that deadline, the Trump administration must present the US Congress with a deal at least 90 days in advance - by the end of August.

However, President-elect Mr Obrador said on Monday that a two-way agreement with the US was just the first step in a new treaty.

"We're very interested in it remaining a three-country deal," he told journalists on Monday. "The free-trade agreement should remain as it was originally conceived."