Trump takes aim at Congress as NAFTA talks set to continue

Will Trump's NAFTA Deal Benefit Automakers

Talks with Canada aimed at bringing the top U.S. trading partner into the tentative deal struck with Mexico broke off Friday without success, but the parties agreed to continue talks this week. If they don't reach an agreement by the end of the week, President Trump has threatened to cut Canada out of the deal and forge ahead with a new pact with Mexico alone. "There is no political necessity to keep Canada in the new NAFTA deal", he wrote on Twitter over the weekend.

Commercial trucks exit the highway for the Bridge to Canada, in Detroit, Michigan U.S. August 30, 2018.

He reiterated his views again at the White House on Wednesday saying that Canada and "other countries have been taking advantage of the United States for many years".

The tentative deal struck with Mexico calls for a horizon of 16 years for the new terms, with provisions for a review of the revised pact every six years. "Canada will not be signing a deal unless it is in the interest of Canadian workers, the Canadian middle class, and Canadians in general".

She said she hoped for "constructive conversations" Wednesday.

"We're not going to accept that we should have to sign a bad deal just because the president wants that", Trudeau told Edmonton radio station CHED.

Negotiations between Canada and the United States are to resume in Washington on Wednesday.

But Congress makes the trade rules in the form of trade promotion authority. Canadian negotiators therefore have less leverage in bargaining with U.S. negotiators than they did before the U.S. -Mexico deal. A public comment period wraps up Thursday and people familiar with the White House deliberations last week said the USA president is eager to move soon after that.

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The dispute over the new U.S. -Mexico trade deal looks set to continue with Canadian Prime Minister Justin Trudeau trying to play hardball in the face of conservative criticism. The best known Chapter 19 cases involving Canada have had to do with softwood lumber, and in the mid-2000s, the dispute resolution panels ruled repeatedly against the U.S., strengthening Ottawa's negotiating position. "We'll see, and that depends on the kinds of negotiations we have", he said. "You can't fix NAFTA without fixing issues with Canada", said Senator Ron Wyden, the top Democrat on the Senate Finance Committee, which oversees trade.

But other issues have yet to be worked out, including Canada's cultural exemption in NAFTA.

In making his argument, Trudeau warned that abandoning the cultural exemption would be tantamount to surrendering Canada's sovereignty and identity because it could enable, for example, an American network to buy Canadian newspapers or TV networks. Team Trump want to sign an agreement with the current Mexican government, not the one headed by leftist President Obrador that will replace it December 1, and that would be pressured by its supporters to ask for changes.

Canada and the United States previous year traded US$673 billion in goods and services or US$1.3 million per minute, according to U.S. official data.

In the US, businesses, farmers, unions and Congress insistent that there must be a three-nation agreement. "It's pretty hard to see how that would work without having Canada in the deal", AFL-CIO President Richard Trumka said Sunday.

One thing is clear: Congress could help determine who has leverage in this week's bilateral talks.

The loonie had been pressured by the prospect of an escalation in a trade dispute between the United States and China, with U.S. President Donald Trump gearing up to impose tariffs on $200 billion in Chinese goods and Beijing certain to retaliate against any measures.

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