The U.S. and Canada still need to ratify the deal.
After months of delays, U.S. House Speaker Nancy Pelosi on Tuesday announced a new agreement on the renegotiated deal, saying progress has been made on the Democrats' main areas of concerns: workers' rights, the environment and prescription drugs.
In his statement on the agreement, Lighthizer thanked Trump for his leadership and said that after working with both Republicans and Democrats, as well as other stakeholders, the deal "will be the model for American trade deals going forward".
Deputy Prime Minister Chrystia Freeland has arrived in Mexico City where she is slated to appear at a signing ceremony with American and Mexican counterparts 1 p.m. ET.
The USMCA, which overhauls the North American Free Trade Agreement (NAFTA) signed by President Bill Clinton in 1993, requires that 75 percent of automobile components be manufactured in the United States, Canada, and Mexico to avoid any potential tariffs.More news: Heavy gunfire reported in Jersey City neighborhood
Freeland said Canadian officials "have been working intensively, including (having) many conversations over the weekend and this morning with our American partners on getting the deal finalized".
Do you think ratification of the new NAFTA will boost business investment in Canada?.
US President Donald Trump, who had accused Democrats of holding up the treaty, also declared victory.
During an education roundtable at the White House Monday, Trump said he's optimistic the deal would have bipartisan support.
"I hear they're doing very well on USMCA", said Trump. Earlier Tuesday, Mexican President Andres Manuel Lopez Obrador spoke by phone with Trump and Canada Prime Minister Justin Trudeau.More news: Mike Norvell hired as Florida State's new coach
"Now is the time to vote on it", Lopez Obrador said Monday. "I am optimistic we can reach a deal". In recent weeks, the discussions have focused on the deal's labour enforcement.
The new breakthrough follows US labour unions approving Mexico's proposal to phase-in a tighter definition of what constitutes North American steel as some concessions on enforcing the agreement's provisions on labour in the Mexican auto sector.
Neal talked about the difficulties of etching out the deal, but said he continued to work with the administration's trade rep, Robert Lighthizer.
However, the latest breakthrough appears to have followed Mexico accepting - with a five-year phase-in period - a USA demand to tighten the definition of North American steel in a section of the agreement dealing with where cars and their parts can be said to originate.
While a final copy of the updated text has not yet been made public, according to the Democrats, the text of the deal first signed on to by the three countries has been amended in several ways. Major U.S. stock indexes turned positive after the announcement.More news: North Korea opens mountain spa, ski resort in tourism push