Trudeau turns attention to Mexico in midst of tensions over NAFTA

13 October, 2017, 00:41 | Author: Chad Mckenzie
  • USA Trump and Trudeau at the White House | NAFTA

The North American Free Trade Agreement could be on the verge of disintegration after coming under sustained attack from Donald Trump, a longtime critic of the three-nation deal.

"Neither Mexico nor Canada nor major elements within the USA business community and government want to see NAFTA die", Meyer says.

US President Trump has warned that tough talks lie ahead on the future of NAFTA, indicating that the US could withdraw. "The problem is that we are running against a clock", he says. Trudeau said he believed the Nafta talks could still end in a "win, win, win".

Trudeau was heading to Mexico City after leaving Washington for talks with President Enrique Pena Nieto.

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"We all understand that it has worked", he said of the 23-year-old North American Free Trade Agreement, before adding, "As we think about redoing trade agreements between Canada, the USA and Mexico, there is opportunity for improvement". "Canada will continue to work with the U.S.to modernize NAFTA so that people in Canada, the United States, and Mexico can benefit from good, well-paying jobs and increased opportunities to provide for their families".

But he added: "President Trump played the role of "the terminator" on the proposed Trans-Pacific Partnership trade deal". Both leaders are keen to see talks succeed.

Britain could join a formal trade alliance with the United States, Canada and Mexico if the European Union refuses to clinch a post-Brexit trade deal, the Daily Telegraph newspaper reported on Tuesday.

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.

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However, a study released on Thursday by the Motor Equipment Manufacturers Association, which represents US auto parts makers, showed the higher content requirements would lead to the loss of up to 24,000 U.S.jobs, as some companies would forgo NAFTA's tariff-free benefits and ship in more components from other countries. Trudeau said he recognized that there were proposals in the deal that the U.S. and Canada disagreed on, but insisted that the talks had begun on Wednesday "in good faith".

Mexico has been more assertive with Washington, talking openly about abandoning NAFTA if need be or slashing imports of US grain. 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", he said in a speech delivered in Mexico.

NAFTA negotiators face tough new USA 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. "Any trade proposal that makes multinational corporations nervous is a good sign that it's moving in the right direction for workers". "We have to be prepared for the different scenarios that could come out of this negotiation".

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