To hear President Donald Trump tell it on Monday, the United States is abandoning the NAFTA free trade deal between the US, Canada and Mexico in favor of a bilateral agreement between the US and Mexico. Trump, like labour unions in the US and Canada, has expressed concern about the NAFTA-era migration of auto jobs to lower-wage Mexico.
Trump will make an announcement on trade from the Oval Office at 11 a.m.in Washington, according to a statement from the White House.
An agreement between Mexico and the United States would open the door for Canada to return to the negotiations to rework the 1994 trilateral trade deal.
Trump said the NAFTA name will be discarded, citing a "bad connotation".
Trump made the comments after announcing an "understanding" with Mexico that could lead to an overhaul of the 24-year-old trade pact, which Trump has called a job-killing "disaster".
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And there are political reasons to keep Canada inside the regional bloc: "Mexico will have a hard time selling "Trump's deal" back home if Canada does not think it is a good deal", said Daniel Ujczo, a trade attorney with Dickinson Wright PLLC.
For that to happen, US Congress must be notified 90 days in advance, which means the administration must send the notice by the end of the week.
Canada foreign minister Freeland expected to arrive for talks in Washington shortly - senior u.S. That's also technically true for Congress because the administration notified US lawmakers that they were negotiating a "trilateral" agreement.
The U.S. push to finish NAFTA talks comes at the same time it's in a spiraling trade war with China, and has threatened to place tariffs on cars imported from major manufacturing centers in Asia and Europe - efforts that have created new uncertainty for many businesses and investors.
Canada's foreign minister, Chrystia Freeland, spent most of her time on visits to the USA lobbying governors and congressmen rather than talking seriously to our trade negotiators. They will also be required to use more local steel, aluminum and auto parts, and have a certain proportion of the vehicle made by workers earning at least $16 an hour, a boon to both the United States and Canada. If not, Trump will advance the deal with Mexico and leave Canada behind.
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Trump strongly campaigned on the issue of repealing or completely redoing NAFTA, a trade deal he argues was "terrible" for the United States and destroyed manufacturing in states across the country.
"There are still issues with Canada but I think they could be resolved very quickly", the official said.
If an agreement is reached between the three parties, the push then turns to Congress, where many Democrats remain critical of NAFTA.
But Trump has called the agreement "the worst deal maybe ever signed" and moved ahead with tariffs earlier this year.
"I believe the president is on the phone", Trump said, getting no response. He said he may include Canada in the Mexican deal. The recent push for a deal is in part to have it signed before the new president takes office in December.
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That is, if Canada's re-entry into the talks and political posturing do not add new roadblocks to the negotiations. Trump flipped states like Michigan, Pennsylvania, and OH from Democrat to Republican in 2016 by promising economic prosperity in part by improving trade deals. Federal elections in Mexico and the United States are leading officials in both countries to rush a new trade deal.