The *tell* is within: “we have agreed not to conduct our negotiations publicly.”
Remember, U.S.T.R. Lighthizer, Jared Kushner, Secretary Ross and the U.S. team have never made a public comment about internal negotiations, ever.  The only trade team that has discussed the dialogue, and specifically their individual terms within the dialogue, is Justin from Canada’s team, specifically Chrystia Freeland.  This has been a weakness of team sparkle socks all along because it highlights their political prism.
So when princess rainbow sparkles and Justin back away from talking about their unicorn demands they are signaling a shift from a political prism toward a more economic-based set of determinations.  Essentially, their political approach has failed; they are weakened.

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“what both sides need” interpreted: Justin and Chrystia are trying to gauge the best retreat from the position of political damage. I’m going to hold-off on expanding consequences to Canada joining until I see if they *actually* do join. However, the biggest part of the U.S./Mexico agreement would eliminate Canada’s ability to use the NAFTA loophole.
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What happens when the silent majority stand up in full force and elect a president entirely focused on advancing the interests of Main Street over Wall Street?  What happens when that President takes office and begins systematically instituting a comprehensive series of economic policies that are targeted to Make America Great Again?
The middle-class of America benefits.  That’s what happens.  And when economic, trade, and U.S. financial policy are focused to improve the outcomes for the middle-class, the entire landscape of beneficial outcomes within the U.S. economy shifts…. Bigly.

Express Pro Survey – America’s blue collar workers may be one of the most optimistic groups in the country today. According to a new study conducted by The Harris Poll and commissioned by Express Employment Professionals, 85 percent of America’s blue collar workers see their lives heading “in the right direction.”
Sixty-nine (69) percent also say their local communities are heading in the right direction, and 51 percent say the same about the country as whole.

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During analysis of the U.S-Mexico trade agreement terms it became obvious that *if* Canada was going to join the pact they would have to almost completely acquiesce and reverse on their former positions.   It now is entirely plausible that just might happen.
When entering the meeting with U.S.T.R. Robert Lighthizer, Canadian Minister Chrystia Freeland spoke specifically about “Canadian workers”.  Justin from Canada has been very cautious in his word choices also speaking about “Canadian workers”.  As Freeland exited the first meeting with Lighthizer the reasoning for their collective word choice is becoming apparent.  Canada is preparing to take a knee, and they are positioning for the least amount of political damage possible.  WATCH the exit of first meeting:

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Team Trump has positioned this perfectly. By using NAFTA section 2202, to construct a modification of the original 1993 agreement, Lighthizer is intending to send a 90-day notification letter to congress informing them the U.S. and Mexico have agreed to modifications of their bilateral trade agreement.
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Today the Bureau of Economic Analysis presented the second estimate for the second quarter GDP growth.  The second review increased the growth upward to 4.2%.

Within the data (full pdf release w/ tables) there are several interesting aspects.

(1) The upward revision to nonresidential fixed investment was mostly accounted for by investment in software. (2) Imports, which are a subtraction in the calculation of GDP, were revised down. Within goods, the downward revision was widespread, the largest contributor was petroleum.
In addition to presenting revised estimates for the second quarter, today’s release presents revised estimates of first-quarter wages and salaries, personal taxes, and contributions for government social insurance. Wages and salaries are now estimated to have increased $122.5 billion in the first quarter of 2018, an upward revision of $0.4 billion.  (source data)

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As Foreign Minister Chrystia from Canada arrives in Washington DC to meet with U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin is interviewed by CNBC.
Triple Play: Finalize NAFTA (or two bilats); fill in the details on previously agreed EU deal; then face-down red dragon (China).

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Additionally, Mnuchin had some impromptu remarks (below):
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National Economic Council Director Larry Kudlow holds an impromptu press gaggle at the White House to field questions about trade and related MAGAnomic matters.

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Additionally Kudlow had some scheduled media appearances (below).
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Commerce Secretary Wilbur Ross appears on Fox News to discuss the U.S-Mexico trade agreement and the unlikely possibility of Canada to join the agreement.  In order for Canada to join the agreement they would need to remove protectionist tariffs (dairy); remove subsidies to several sectors (lumber, aeronautics); and in large measure open their economy to free, fair and reciprocal trade.
Additionally, The Wall Street corporations who have exploited NAFTA for strategic financial advantage are unhappy with the removal of the NAFTA loopholes.

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By choosing politics over fundamental trade economics Justin and Chrystia from Canada have painted themselves into an isolated position on the renegotiated North American Trade deal.  Here’s the basic Canadian conundrum.

The U.S. and Mexico have agreed to manufacturing origination terms; wage and labor improvements; elimination of AG subsidies and non tariff barriers; and removal of all protectionist tariffs – so long as the structural terms of commerce are upheld.
In order for Canada to join the U.S. Mexico deal they would need to:

• (1) eliminate soft-wood subsidies in the lumber sector;
• (2) eliminate protectionist tariffs in the AG (Dairy) sector;
• (3) accept the 75% rules of origin, eliminating the NAFTA loophole;
• (4) agree to the enforcement mechanisms for all the above;
• (5) allow U.S. banks to operate in Canada (financial sector).

Each of these five issues, now locked-in and agreed by the U.S. and Mexico are “take-it-or-leave-it” terms for Canada to join. There’s almost no-way, given the politicization of the Canadian plan, for Justin and Chrystia to agree to those terms and keep their fragmented political support base appeased.
Therefore, absent total acquiescence, it is likely Canada will keep their soft-wood lumber subsidies, keep their protectionist Dairy tariffs, keep their banking rules blocking U.S. access, and face a 25% duty on U.S. auto imports – effectively destroying their auto manufacturing sector.  Car companies (ex. Toyota) will simply leave Canada and return to building/assembling in the U.S.
Here’s the content from a conference call filling in more details:
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So much good news: WASHINGTON (Reuters) – The trade deal between the United States and Mexico will stand even if Canada does not come to an agreement with the Trump administration in the renegotiation of the North American Free Trade Agreement (NAFTA), Mexico’s foreign minister said on Monday.

“If for any reason the government of Canada and the United States do not reach an agreement, we already know that there will still be a deal between Mexico and the United States.”
~ Mexican Foreign Minister Luis Videgaray (link)

Remember those “private meetings” between Jesus Seade and Robert Lighthizer?
It is said: a picture is worth a thousand words.  Cue the audio visual:

The incoming Mexican President, Andrés Manuel López Obrador,(AMLO)’s representative is Jesus Seade. The outgoing Mexican President Pena Nieto’s representative is Mexican Secretary of Economy Idelfonso Guajardo.
Why the joy in Seade and the defeated Guajardo?  The answer is in the details:
One of President Trump’s principal objectives in the renegotiation is to ensure the agreement benefits American workers.  The United States and Mexico have agreed to a Labor chapter that brings labor obligations into the core of the agreement, makes them fully enforceable, and represents the strongest provisions of any trade agreement.

Key Achievement: Worker Representation in Collective Bargaining

The Labor chapter includes an Annex on Worker Representation in Collective Bargaining in Mexico, under which Mexico commits to specific legislative actions to provide for the effective recognition of the right to collective bargaining.

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In direct relationship to the checkbook policy that impacts middle-class Americans the U.S./Mexico trade deal is the biggest win so far in Trump’s presidency.   There are such massive ramifications it could take days for anyone to comprehend how the granular details have such massive downstream consequences. The deal is incredibly complex.

At the 30,000 ft level, the deal positions Mexico to retain their current multinational investments, and through a series of sector-by-sector standards on origination the deal simultaneously closes the fatal NAFTA loophole.  The agreement makes an economic manufacturing partnership between the U.S. and Mexico; and for assembly products third parties will have to produce parts and origination material within the U.S. and Mexico.
U.S.T.R. Lighthizer has put some details forward:
♦The NAFTA Loophole closure is explained in Summary Form HERE; with emphasis on the Auto-Sector.  The key is a 75% part origination level for auto-assembly; and a 40-45% level for parts with a minimum $16/hr wage rate.  The source-origination rate (75%) is even higher than all previously forecast negotiation results.
Example of downstream consequences/benefits:  German auto-maker BMW recently built a $2 billion assembly plant in Mexico (almost complete).  Most of their core parts were coming from the EU (steel/aluminum casting components) and/or Asia (electronics).  Now the assembly plant will have to source 75% of the auto-parts from the U.S. and Mexico, with 45% of those parts from facilities paying $16/hr.  Result: BMW will need to modify their supply chain and build auto parts in the U.S. and Mexico.
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