"This deal will help a lot in the national economy, because it means investment, it means employment, and it means we will improve our economic and trade relations" said Lopez Obrador.
U.S. President Donald Trump noted on Twitter Tuesday his trade pact apparently received "very good Democrat" support and that the agreement "will be the best and most important trade deal ever made by the United States of America".
The new deal is sure to stoke anger in some circles, with the Canadian and US aluminum and automotive industries in particular angry that Mexico had not agreed to tighten the definition of what constitutes North American aluminum like it did with steel.
"There is no question that this trade agreement is much better than NAFTA", House Speaker Nancy Pelosi said as she announced the deal.
The main U.S. labor federation, the AFL-CIO, also called it a "vast improvement" on the original accord, which was signed in November 2018 but then got bogged down in the ratification process.
The announcement came one day after Richard Trumka, president of The American Federation of Labor and Congress of Industrial Organization (AFL-CIO), said that a deal was reached between Democrats and the White House and his union was reviewing it.
The changes also have toughened measures to monitor environmental provisions.
They also have pressed for removal of a provision that grants big internet services providers liability protections for third party content, and are seeking to relax data protections for biologic drugs that they fear will mean higher drug prices.
Mexican Foreign Minister Marcelo Ebrard congratulated the negotiators for reaching a second set of agreements to answer US concerns about labour rights in Mexico, and regional content.
The United States-Mexico-Canada Agreement (USMCA) will now go to the countries' legislatures for final approval.
Mr. Trumka said the deal isn't ideal "but there is no denying that the trade rules in America will now be fairer because of our hard work and perseverance".
For Democrats, the conflicting images bolstered their claim that they didn't come to Washington merely to fight Trump - that they can "walk and chew gum", to cite a claim repeated by Democrats and their aides for the last several weeks.
Republican and Democratic U.S. lawmakers say there is broad support for revising the trade pact, which encompasses $1.2 trillion in annual trade across the continent and supports 12 million U.S.jobs and a third of American agricultural exports, backers say.
But US labor groups and Pelosi's Democrats had voiced skepticism over the Mexican government's ability to enforce the new rules.
Pelosi, in the meantime, has given mixed signals about when the USCMA deal could be finalized.
But the deal needs to be ratified by all three players, and congressional Democrats in Washington have been unwilling to move forward.
Ratification had looked precarious in recent weeks, with Lopez Obrador firmly rejecting the initial United States proposal for labor inspectors.
Mexico emphasized that there would be no American "inspectors" visiting Mexican factories or businesses.
The new provisions include "facilities-based enforcement" in Mexico by "independent labor experts", with penalties for goods that fail to meet standards.