Canada's Trudeau to tell Trump: we're not your problem at NAFTA

Marsha Scott
October 13, 2017

"We'll see if we can do the kind of changes that we need", he said. "So we'll see what happens with NAFTA", Trump said, adding that it "has to be fair to both countries".

Ending NAFTA, however, would result in a full reversion to tariffs under World Trade Organization rules, according to the Boston Consulting Group study sponsored by the Motor Equipment Manufacturers Association.

The figure is dwarfed by their trade with the USA: more than $480 billion a year ago for Mexico and more than $540 billion for Canada.

The country's foreign relations secretary said this week it would not be a big deal for Mexico to just walk away from the talks, and that Mexico won't accept "limited, managed trade" - an apparent reference to demands for higher USA and regional content rules on products like auto parts. "We have to protect our workers, and in all fairness, the prime minister wants to protect Canada and his people also".

"It's possible we won't be able to make a deal and it's possible that we will", Trump said, noting the close relations between the two countries and leaders.

The U.S. Chamber of Commerce on Tuesday accused Trump's administration of trying to sabotage the talks with "poison pill proposals", including demands for more favorable treatment for the U.S. side on auto production, and a "sunset clause" to force regular negotiations.

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US negotiators have presented a proposal for a so-called "sunset clause" that would see the North American Free Trade Agreement expire after five years unless the parties can agree to extend it, according to two people familiar with the talks. Mexico strongly opposes such a move, which would damage its own vehicle industry.

On the U.S. side the event was co-chaired by Fedex Freight's CEO Michael Ducker and U.S. Chamber of Commerce President Thomas Donohue. The expected to propose substantially raising the regional requirement, from 62.5 percent now, and potentially add a U.S. -specific content requirement.

Meanwhile, a veteran Mexican diplomat has expressed fears about the possibility that NAFTA could be ditched in favour of bilateral agreements, an issue raised by Trump as well.

"If the required content to hit the threshold for a NAFTA vehicle is too high, people may say, 'Look, it's just too hard, it's too high, so we'll just ship the vehicles in, '" Magna International Inc.

On Friday, Ohio Senator Sherrod Brown offered his support, saying it was "about time" U.S. trade negotiators "took the pen away from corporate lobbyists and started writing trade policy that puts American workers first".

Foreign Minister Chrystia Freeland said Trudeau would "explain really clearly to the President. that Canada is not America's problem". -Canada deal that would leave Mexico out entirely.

Other reports by MaliBehiribAe

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