Trump on Wednesday repeated his warnings that he might terminate the pact and said he was open to doing a bilateral deal with either Canada or Mexico if three-way negotiations fail. But now much of the American economy is built around the certainties of NAFTA. He's laid down hard demands that would be impossible for Mexico or Canada to accept.
"I hope the Trump Administration realizes that negotiating without foresight doesn't just adversely affect our economy, it is a return to a panicked approach to globalization and adversely affects the jobs of the 21 Century workforce that depend heavily on American ingenuity".
NAFTA erased most trade barriers along the United States, Canada and Mexico and led to an explosion in trade between the three countries.
"He views it as a violation of USA sovereignty", she added.
In the big picture, Trump's mischief on trade agreements is just one more piece of wreckage to be added to his pile of disasters, from which Canada is suffering collateral damage. It also wants to scrap a dispute-resolution process favored by Canada.
Since the visa lift, tourism between Canada and Mexico has increased, though asylum claims have too; close to 950 have been lodged since the start of this year, compared to 250 in 2016. According to reports by Canadian media, Prime Minister Trudeau told President Trump behind closed doors that his preferred option was to modernize the continental accord. But he acknowledged that "we have to be ready for anything and we are".
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The negotiators are under pressure to reach a deal this year before presidential elections in Mexico and midterm elections in the United States raise the political temperature in 2018. "I'm not surprised that Ambassador Lighthizer hasn't been able to square that circle".
"Some of us in Mexico think that on several occasions our Canadian friends have come close to throwing us under the bus", said Arturo Sarukhan, the former Mexican ambassador to the USA, said at a NAFTA-related event hosted by Dentons law firm in D.C. on Wednesday. But Congress can fight back.
A rule requiring a hefty portion of automobiles to be made in the US, not just in the three-country NAFTA zone. They could also threaten to block the president's agenda unless he secures congressional approval to withdraw.
"Our market is 10 times the size of either of those markets, so if you gave equal percentage market share, you'd be giving them 10 for one", Ross told a trade forum organized by a Washington law firm. Some of the tariffs wouldn't be especially high. But Mexican tariffs on many American farm products could soar to as high as 37 percent on corn, for example, notes Caroline Freund, a senior fellow at Peterson.
"So saying, we are ready for anything and we will continue to work diligently to protect Canadian interests, to stand up for jobs, and look for opportunities for Canadian business and citizens of all of our friends and neighbour countries to do well". In addition, the United States wants to add a new 50 percent US -specific content requirement, something that was not in the earlier agreements.
Instead, companies may ship in more products from low-priced countries outside the region, paying USA tariffs ranging from 2.5 to 5.0 percent.