Mexico: Trump Warning to Cancel NAFTA is Only a Strategy

NAFTA Round One: Gordon Johnson Weighs In On Free Trade's Effects On Steel, Manufacturing

Although many Americans have benefited from NAFTA, Lighthizer said that the agreement has "failed. countless Americans".

First, countries renegotiate FTAs for different reasons than the ones that lead them to initiate talks on new FTAs. For example, with the complex, intertwined, multi-tiered automotive supply chain, a Tier 4 component may be designed in Canada, built in Mexico, shipped to a Tier 3 supplier in the United States who then incorporates it into their product (which might be designed in Japan or Korea), who then ships it to a Tier 2 supplier in Canada...and on and on until final assembly. In other words, Canada is taking NAFTA renegotiation very seriously. For him, an improved trade deal isn't the litmus test for accepting a modernized NAFTA.

The Canadian economy is also reliant on trade with the U.S. with more than 75 percent of the country's exports going south of the border.

While the president's renewed threat August 22 reignited concerns, Canada and Mexico collectively shrugged their shoulders in response to Trump's latest comments. Rural America, where Trump rolled up a two-to-one vote margin, was prominently highlighted. The top priority for the administration is the reduction in the United States' trade deficit.

Canada brushed off suggestions that Trump's threats would disrupt the talks.

"As we said last week, trade negotiations often have moments of heated rhetoric", said the statement attributed to Canadian Foreign Minister Chrystia Freeland.

"Personally, I don't think we can make a deal because we have been so badly taken advantage of", Trump said during the Arizona rally.

The Honourary Chairperson of the Council, Maude Barlow, recently said in a press release, "If (Canada's) government is truly concerned about the environment, labour and public protection, it should look at the glaring problem: Chapter 11, which has made Canada vulnerable to billions of dollars of corporate lawsuits over our environmental and public policy decisions". During the presidential campaign, he promised Americans to pull the country out of "useless and unprofitable" trade pacts.

Canada is the No. 2 destination for California agricultural exports and the top customer for USA farm exports; Mexico ranks fifth for the state and third for the nation.

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But more importantly, as Phil Levy of the Peterson Institute for International Economics told my colleague Zeeshan Aleem, "there is no mechanism" for a trade deal to guarantee a bilateral trade balance.

It's no surprise that brands around the world want Ronaldo, one of the most recognizable athletes in the world, to endorse their products.

A second round of talks is set for Sept. 1-5 in Mexico, followed by meetings in Canada in late September and back to the United States in October.

"Abruptly ending NAFTA could create a string of unintended consequences that need to be carefully considered", said Ann Wilson, an executive at the Motor & Equipment Manufacturers Association, which represents auto suppliers.

In a joint statement issued at the end of five days of negotiations in Washington, the top trade officials from the three countries said Mexico would host the next round of talks from September 1 to 5.

There are, however, a few real points of contention.

A drawn-out process does not concern the farm bureau, which was not necessarily seeking renegotiation of NAFTA in the first place, Nigh said.

Nevertheless, the currency is up by 19% since Trump's inauguration.

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