Published: Sat, January 13, 2018
Global Media | By Abel Hampton

Canada Draws Line in Trade Dispute with Trump

Canada Draws Line in Trade Dispute with Trump

Canada is becoming more convinced that President Donald Trump will soon announce USA intentions to withdraw from the North American Free Trade Agreement.

President Donald Trump plans to use Mexican concessions in ongoing NAFTA negotiations to pay for his proposed 18 billion dollar border wall, he told The Wall Street Journal in an interview.

"I understand that a lot of things are hard to negotiate prior to an election", Trump said.

The announcement casts new doubts on the prospects for talks to modernize the trade agreement, which Trump has repeatedly criticized as unfair for the United States.

Canada's dollar and Mexico's peso dropped and Mexican stocks retreated following reports on Wednesday that Canada sees an increasing chance the US will exit Nafta.

But taking a tough stand is an approach the Americans can appreciate, International Trade Minister Francois-Philippe Champagne argued Thursday. "When people see that you're firm, you get respect".

We are fortunate to have the Americans as our neighbour and No. 1 trading partner, and we're proud of the great relationship between the two countries.

Canada is riled about duties on lumber and planemaker Bombardier Inc, which is based in the politically important province of Quebec, where Trudeau's Liberals are looking to build up support.

Separately, Canada launched a wide-ranging trade complaint against the United States, the World Trade Organization said on Wednesday, in a dispute that Washington said would damage Canada's own interests and play into China's hands.

"We have always said that this is a possibility", a Mexican government source with knowledge of the talks told Reuters, referring to the prospect of a USA withdrawal.

Canadian companies and industries that would be most acutely impacted by the pact's demise are largely stuck in neutral given the uncertainty of what might replace it, analysts and executives have said.

Markets shuddered on signs the US may be preparing to withdraw from Nafta.

Mexico's Economy Minister Ildefonso Guajardo, who heads his country's negotiating team, told reporters earlier this week that 10 of the 30 chapters that required updating are ready to be closed at the Montreal gathering.

The meeting will take place as part of the upcoming sixth round of negotiations, to be hosted by Montreal, Canada on January 23-28, and could move up the round of talks to January 21, said Castanon.

"I told the president that it would be a paradox of enormous irony that during this time when we passed the tax bill and we're experiencing economic growth, that we all of a sudden find ourselves in a foreign recession that could dry all that out", Roberts said.

"We have some new ideas", she added, but declined to give details.

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