Trade deal possible with Canada, minus Mexico

Posted October 13, 2017

But he added: "President Trump played the role of "the terminator" on the proposed Trans-Pacific Partnership trade deal".

President Donald Trump's trade negotiators entered the latest round of NAFTA talks Wednesday under growing pressure inside their own country to step back from a confrontational stance that's left the US isolated at the negotiating table.

Canada, which shares Washington's concern over competition from cheap Mexican labor, is notably pushing for Mexico to improve workers' wages under the new NAFTA - something the Pena Nieto administration says should be determined by the market, not dictated by a trade deal. But speaking to media after the talks, the Prime Minister said he is open to a new two country accord if that is what it takes to save free trade between the USA and Canada. "I'm of the view that over the long term, because trade has been so beneficial for everyone, that we will get through periods of question".

"There's a path to be optimistic here and, you know, maybe he'll come around", Morneau said, an apparent reference to Trump.

"If every marriage had a five-year sunset clause on it, I think our divorce rate would be a heck of a lot higher", Canada's ambassador to Washington David MacNaughton said last month.

"There's been huge investments in Canada, the US and Mexico, that are long-term assets", said Don Walker, chief executive officer of Magna International Inc. a Canada-based parts maker with more than 25,000 employees in the U.S.

Trudeau told reporters in Washington DC that he agreed with the USA president that that the NAFTA trade deal needed to be revamped and that any new agreement needed to "give citizens opportunities to succeed".

Andres Rozental, a former Mexican deputy foreign minister involved in the original NAFTA talks, said Ottawa had assumed traditionally close ties with the United States would insulate them from problems with NAFTA.

During talks at the White House Wednesday, President Trump suggested the possibility of replacing NAFTA with a new U.S.

USA negotiators on October 12 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. "It makes sense to modernize it", said Glenn Hamer, president and CEO of the Arizona Chamber of Commerce.

Mexico has been more assertive with Washington, talking openly about abandoning NAFTA if need be or slashing imports of USA grain.

NAFTA negotiators face tough new US demands to increase regional content for autos to 85 percent from 62.5 percent, with 50 percent from the United States, according to people briefed on the plan. Under the USA proposal, America would require more to be made in the country and less sourced from other members of the block. "There are several poison pill proposals still on the table that could doom the entire deal".

But there is still some uncertainty whether Trump is deploying tough negotiating bluster or is seriously considering scuppering the agreement. "Or are we going to take a back seat because we refused to cast aside our differences with our greatest trading allies?" "We have always understood that draining the swamp would be controversial in Washington".