NAFTA negotiations teeter as Trump threatens to rip up pact

October 12, 2017

U.S. President Donald Trump threatened to kill NAFTA in a face-to-face meeting with Justin Trudeau, saying "it will be fine" if the trade agreement died.

Hours later, Mr. Trudeau acknowledged for the first time that the 23-year-old trade deal between Canada, the United States and Mexico that has fuelled massive export growth could fall apart.

Mr. Trump raised the prospect on Wednesday of terminating the North American free-trade agreement as Mr. Trudeau sat directly beside him in the Oval Office – with the U.S. President also hinting he might pursue a separate deal with either Canada or Mexico if the talks implode...

As the fourth round of trade talks gets under way..., Mr. Trudeau travelled to the White House seek clarity from Mr. Trump, who has previously threatened to tear up the trade deal but also to simply tweak it. Instead, Mr. Trump was vague about his support for NAFTA, which he said he has opposed "for a long time."

Although he insisted he still believes a deal can be done with the Trump administration, Mr. Trudeau said he realizes the U.S. President can make surprising decisions and might do so with NAFTA...

In this round of NAFTA talks, the United States is expected to hit Canada and Mexico with tough demands on so-called rules of origin for autos, including a requirement that all cars and trucks made within the NAFTA zone contain at least 50 per cent American content in order to be bought and sold tariff-free between the three countries.

U.S. negotiators are also set to take aim at Canada's supply-management system, which fixes prices for milk, eggs and poultry. Time has also been blocked off for talks on trade remedies, which could include the Chapter 19 dispute-resolution panels Canada and Mexico are fighting to keep against U.S. attempts to scrap them...

This is excerpted from 12 October 2017 edition of The Globe and Mail.

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