Donald Trump refuses to commit to trade pact — NAFTA

Trevor Jackson
October 13, 2017

U.S. Chamber of Commerce CEO Thomas Donohue, speaking in Mexico City on Tuesday, said the rules of origin proposal would send more business overseas. 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". "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". "Withdrawing from the agreement also risks a prolonged legal fight over whether the president can exit from the agreement without congressional consent".

"It's going to continue as we figure out new rules, there is going to be some friction", he said on the sidelines of the World Bank-International Monetary Fund annual meetings in Washington. And with no trade incentive to manufacture in the United States other than to avoid the 25 percent truck tariff, more full vehicle production would migrate to low-priced countries such as China, auto experts say.

U.S. President Donald Trump said Wednesday he would be open to doing a bilateral trade deal with Canada, but not Mexico, if talks between the three countries over the North American Free Trade Agreement fall apart.

In an e-mail, Mr Curtis S. Chin, a former United States ambassador to the Asian Development Bank and a senior fellow with the Milken Institute, a non-partisan economic think-tank, wrote: "With Nafta now more than 20 years old, it could well use some revisiting and updating". Trump left open the possibility that the USA would seek to establish bilateral deals with Canada and Mexico if talks were to break down.

People briefed on US proposals to be presented this week said Washington is seeking to sharply lift North American content threshold in vehicle manufacturing.

Canada and Mexico both strongly oppose the concept of a so-called sunset clause, a provision that had been floated earlier.

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The U.S.is expected to propose substantially raising the regional requirement, from 62.5 percent now, and potentially add a U.S. -specific content requirement. Mexico could leave NAFTA and have the strength to move on without any serious long-term structural damage to the economy, he said.

The hard issue of rules of origin will be addressed mostly at the end of the current talks, according to a schedule obtained by Reuters. Scheduled talks in this session have been extended by two days to Tuesday.

Some trade observers said it is hard to see how negotiators could reach an agreement given USA demands that many see as nonstarters.

Trudeau and Canadian Foreign Minister Chrystia Freeland met with members of the House Ways and Means Committee in Washington Wednesday morning, with Chairman Kevin Brady, R-Texas, saying the committee was dedicated to "successful" negotiations.

As many as 50,000 workers at auto parts suppliers could lose their jobs due to increased tariffs if the US pulls out of the North American Free Trade Agreement, according to a study released Thursday by the Motor and Equipment Manufacturers Association, which lobbies for suppliers in Washington.

"There will always be challenges that come up that we can thoughtfully work through", he told the lawmakers. Bilateral trade between the two countries was valued at almost $882 billion in 2016.

Other reports by TheDailyFarc

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