Trump expected to announce trade deal with Mexico as part of NAFTA talks

UPDATE: U.S. and Mexico reached a deal on Monday to change NAFTA. Talks with Canada are expected to begin immediately, U.S. President Donald Trump said.

Mexico and the United States are close to agreement on bilateral issues in the renegotiation of the North American Free Trade Agreement (NAFTA), a top Mexican official said on Monday, as U.S. President Donald Trump tweeted a “big deal” was “looking good.”

When asked by reporters if a deal had been reached, Mexican Economy Minister Ildefonso Guajardo said an announcement was “probably on the agenda,” but that he still had to conclude a “very important” issue.

READ MORE: Freeland heading to Washington after Trump announces plans to scrap NAFTA

The White House said Trump would make an announcement on trade at 11 a.m. ET.

Separately, a Mexican source familiar with the talks said it was “almost certain” there would be an announcement on Monday.

Guajardo was speaking on his way into the office of U.S. Trade Representative Robert Lighthizer for talks.

WATCH: Chrystia Freeland says once Canada will rejoin NAFTA talks once U.S.-Mexico bilateral done

2:29 Chrystia Freeland says once Canada will rejoin NAFTA talks once U.S.-Mexico bilateral done

An agreement between Mexico and the United States would open the door for Canada to return to the negotiations to rework the 1994 trilateral trade deal. The NAFTA talks have dragged on for more than a year.

U.S., Mexican and Canadian stocks opened higher on Monday on optimism about a trade deal. The Mexican peso gained more than 1.2 per cent against the U.S. dollar.

WATCH: Trudeau encouraged by U.S.-Mexico NAFTA talks but will only sign a deal that’s good for Canadians

1:06 Trudeau encouraged by U.S.-Mexico NAFTA talks but will only sign a deal that’s good for Canadians

The Mexico-U.S. discussions have focused on crafting new rules for the automotive industry, which Trump has put at the heart of his drive to rework the pact he has repeatedly described as a “disaster” for American workers.

Still, Trump, who on Saturday had suggested that an agreement could be imminent, tweeted on Monday morning: “A big deal looking good with Mexico!”

Guajardo said on Sunday that the three sides would need to work at least another week once Canada rejoined the talks.