Trump's words hang over NAFTA table as USA business frets

Aaron Brown
October 13, 2017

Hosting the Canadian prime minister at the Oval Office, Trump said the USA had "a tough negotiation" over NAFTA ahead, which also includes Mexico, adding that it had to be fair to all countries. More than 310 state and local chambers of commerce sent a letter to the administration urging the United States to improve but not end the trilateral agreement that, they said, has contributed to $1.2tn annually in trade.

Oil prices have suffered from data released late Wednesday by the American Petroleum Institute (API) showing a surprise build in United States crude inventories and gained little from a report by the International Energy Agency, released Thursday, suggesting the global oil market will be in balance next year despite rising output.

Trudeau, in comments later at the Canadian Embassy, said he remains optimistic about the potential for a NAFTA deal but noted that Canadians must be "ready for anything".

"If we can't make a deal, it'll be terminated and that will be fine", Trump said. The National Automobile Dealers Association said it was concerned about any changes that would make cars costlier. President Donald Trump has threatened recently to withdraw completely from the deal, which was enacted in 1994 to create a free-trade zone between the U.S., Mexico and Canada.

North American Free Trade Agreement negotiators are set to cover the hard issue of government procurement on Thursday as they try to revamp the pact that U.S. President Donald Trump has threatened to terminate. Mexico could leave NAFTA and have the strength to move on without any serious long-term structural damage to the economy, he said.

One of the most contentious USA proposals is around so-called rules of origin for vehicles, which govern what share of a auto must be built within NAFTA countries to receive the pact's benefits.

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Last year, average USA oil production was 8.9 million bpd, lower than the 2015 level of 9.4 million bpd. But, the oil group soon moved to curb production-along with other oil producing nations-in late 2016.

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The U.S. side sees strengthening the rules of origin for the auto industry as a way to bring back automotive production and jobs from Asia.

The Chamber and the trade group for Mexico's auto industry already have come out against an anticipated proposal to raise USA -specific content.

According to a schedule seen by Reuters, meetings on government procurement, cross-border services trade, environmental issues and state-owned enterprises were set to conclude for the current round on Thursday. Scheduled talks in this session have been extended by two days to Tuesday.

Mexico and Canada do some $20 billion a year in bilateral trade. "There are several poison-pill proposals still on the table that could doom the entire deal", Donohue said.

"The comedy show is unfolding in Washington, there's no question about it", he said.

Trudeau's visit to Mexico is his first official sojourn to the country and follows Pena Nieto's visit to Canada in June 2016.

Other reports by Free-Prsite

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