The US and Mexico have reached a preliminary agreement that resolves key bilateral trade issues.

Donald Trump said on Monday that both countries will be entering into a new trade deal called the United States-Mexico trade agreement.

“They used to call it Nafta,” said the US President. “We’re going to call it the United States Mexico Trade Agreement,” adding that the term Nafta had “a bad connotation” for the US.

The preliminary agreement excludes Canada, will need sign-off from the third country in the treaty.

Trump has long criticised the existing agreement and has demanded renegotiations of the 1994 agreement over the past year.

No details of the new deal have yet emerged but are expected to be shared shortly in a news conference.

A spokesman for Canadian Foreign Minister Chrystia Freeland has said that Canada will continue to work toward an agreement and is in contact with trading partners.

“We will only sign a new NAFTA that is good for Canada and good for the middle class. Canada’s signature is required,” said a spokesman in an email.

outgoing Mexican President, Enrique Peña Nieto, said that he has also spoken to Canadian prime minister, Justin Trudeau and that they are working toward a three-way agreement by the end of this week.

“I expressed the importance of his reinstatement in the process,” said Nieto said. “In order to conclude a trilateral negotiation this week.”

“It is our wish, Mr. President, that now Canada will also be able to be incorporated in all this,” Nieto added through a translator. “I assume that they are going to carry out negotiations of the sensitive bilateral issues between Canada and the United States.”

On Monday morning, Trump tweeted, “A big deal looking good with Mexico!”