This morning in metals news, President Donald Trump said during a campaign-style rally in Phoenix on Tuesday that the North American Free Trade Agreement (NAFTA) will "probably" be terminated, last week's USA raw steel production was slightly down from the week before and soccer superstar Cristiano Ronaldo's latest endorsement is for ...
He suggested a termination might help jump-start the negotiations, saying "I personally don't think you can make a deal without a termination".
Former Canadian diplomat Lawrence Herman, now a senior fellow at the Toronto think tank C.D. Howe Institute, wrote in an op-ed in Tuesday's Globe and Mail newspaper that "Canada should be considering a world without the NAFTA or, possibly, without even the Canada-U.S. free-trade agreement".
Comments filed in advance of the opening round of talks, in response to a request from U.S. Trade Representative Robert Lighthizer, reflected an overwhelming desire of transportation service providers, automakers and agricultural groups to preserve the basic tenants of the landmark trade agreement that has been in effect since 1994.
The Canadian dollar eked out a modest gain against the USA dollar on Wednesday, supported in part by firmer oil prices, as cautious investors positioned themselves ahead of a meeting of global central bank leaders later this week.
Trump has condemned NAFTA as "the worst trade deal in history" and promised to fix it - or drop out of it altogether. Trump said Tuesday night. No U.S. President is willing to risk that. Instead, the USA has run a trade deficit with Mexico every single year since 1995. Jeff Flake, R-Arizona, a strong proponent of NAFTA, said in an emailed statement that he "will continue to speak up for the countless Arizonans whose jobs and businesses rely on the billions of dollars that NAFTA injects into our state's economy".
Removing existing barriers to trade must remain the top priority for negotiators, rather than creating new ones.
Ahead of the talks last week, the US stressed that negotiations wouldn't just bring about tweaks to the deal, but a much more major overhaul.
The Canadian and Mexican negotiators believe NAFTA needs to be updated.
Without the support of Congress, a president might withdraw the USA from the global agreement, but he could not singlehandedly wave away the law on the U.S. books that implemented NAFTA.
Noting the recent renegotiation talks, Trump -.
Canada brushed off suggestions that Trump's threats would disrupt the talks.
As negotiations on a NAFTA overhaul began last week in Washington, there was wide agreement on the need to modernize the pact to reflect changes over the past two decades, such as the rise of e-commerce. The antagonistic political climate, where the USA wants to win big and Canada and Mexico do not want to lose, severely constrains the set of amendments that all parties can agree upon.
Trump's remarks may be a negotiating tactic, a way of sending a message to Mexico that it should not push back too hard against positions taken by the U.S.in the negotiations.