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NAFTA: Trump open to new US-Canada trade deal excluding Mexico

12 Oct 2017 | By NewsBytes Staff

US President Donald Trump has envisaged a US-Canada trade pact that excludes Mexico, should negotiations to reform the North American Free Trade Agreement (NAFTA) between the three countries fail.

Following his meeting with Canadian PM Justin Trudeau in the White House, Trump said NAFTA would be terminated if no deal was reached.

His comments come amid reports that the NAFTA renegotiation talks have stalled.

In context: Trump open to new trade pact with Canada

19 May 2017Trump kick starts process to renegotiate NAFTA trade deal

On May 19, the Trump administration formally informed the US Congress of its intention to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and Mexico.

The letter to Congress took forward Trump's long-time campaign promise to reform the deal signed in the 1990s.

Trump had previously threatened to cancel the pact, which he described as a job "killer" and "a total disaster."

12 Oct 2017NAFTA: Trump open to new US-Canada trade deal excluding Mexico

What is NAFTA?

NAFTA was signed by US President Bill Clinton in 1993 and implemented in 1994. The agreement eliminated tariffs on most goods traded between US, Canada and Mexico and expanded trade among them.
Trump says new trade pact could help protect US-Canadian jobs

ProposalTrump says new trade pact could help protect US-Canadian jobs

Trump said a new trade pact with Canada, excluding Mexico, would be aimed at protecting both countries' workers.

The latest round of talks to renegotiate NAFTA have reportedly stalled as Mexico opposes the US' move to increase the proportion of American-made components in car manufacturing.

Mexico earlier said terminating NAFTA would damage US-Mexico relations, affecting cooperation on drug-trafficking and other issues.

Trudeau still believes NAFTA renegotiations could be successful

US and Mexican officials want the deal renegotiated by December. Trudeau contends NAFTA renegotiations could still result in a "win, win, win." However, he said Canada must "be ready for anything" if talks faltered. In 2016, trade between the NAFTA countries reached $1.1 trillion.

CriticismUS businesses have criticized Trump's NAFTA renegotiation stance

Earlier this week, the powerful US Chamber of Commerce warned the time to "ring alarm bells" over the NAFTA talks had come.

The business lobby says the Trump administration has put forth "several poison pill proposals" which could torpedo the talks.

This includes a contentious US demand that goods manufactured in the other country should contain more American-made parts to qualify as duty-free.