Trump, Trudeau differ on NAFTA talks


Trudeau joined Trump in the Oval Office at the start of a new round of talks over the North American Free Trade Agreement, which the USA president has threatened to withdraw from if he can't negotiate a better agreement with Canada and Mexico.

"The companies represented at the Business Roundtable are very concerned with reports that the Trump administration will weaken NAFTA with drastic changes that would disrupt supply chains that have greatly benefited USA businesses, workers and consumers over the last two decades", Josh Bolten, BRT's president and CEO of the group, wrote in a blog post.

The former Conservative leader, who's known as an ardent free trader, says powerful anti-trade forces that predate Trump's presidency are at play in American society and aren't going away anytime soon.

"There's a path to be optimistic", he said.

Today, Prime Minister Trudeau arrives in Mexico for meetings with President Enrique Pena Nieto. Trump left open the possibility that the United States would seek to establish bilateral deals with Canada and Mexico if talks were to break down.

"Even worse, withdrawal from NAFTA would put at stake millions of American jobs in every sector of the US economy, the competitiveness of USA -produced goods and services, and our country's standing as a global economic leader", Bolten said.

In lieu of an agreement, Trump said that he could envision the United States pursuing separate deals with Mexico and Canada, a move that would be a nonstarter with business groups and among lawmakers on Capitol Hill.

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As well as the sunset clause, the United States wants to boost how much North American content autos must contain to qualify for tax-free status and eliminate a dispute settlement mechanisms that Canada insists must stay.

"There's been huge investments in Canada, the US and Mexico, that are long-term assets", said Don Walker, chief executive officer of Magna International Inc. a Canada-based parts maker with more than 25,000 employees in the U.S. But some agricultural products would be slapped with with far higher duties, including a 25% hike on shipments of beef, 45% on turkey, 75% on chicken, potatoes and high fructose corn syrup sent to Mexico from the US.

"I think Justin understands that if we can't make a deal, it will be terminated and that will be fine", he said. It's time after all of these years and we'll see what happens. US negotiators have countered with a proposal that would effectively grant the other countries less access, people familiar with the talks say.

The expected to propose substantially raising the regional requirement, from 62.5 percent now, and potentially add a U.S. -specific content requirement.

The rules of origin demands are among several conditions that the U.S. Chamber of Commerce has labeled "poison pill proposals" that threaten to torpedo the talks.

But there is still some uncertainty whether Trump is deploying tough negotiating bluster or is seriously considering scuppering the agreement.

As the pair sat down, trade negotiators huddled nearby in the Washington suburb of Arlington, Virginia for another round of talks, complicated by the aerospace spat.