U.S. proposes NAFTA sunset clause, raising tensions in talks

Posted October 13, 2017

Business groups are raising alarms about the Trump administration's proposals to update the North American Free Trade Agreement (NAFTA) as the fourth round of talks started on Wednesday. Still, to this day, President Trump has seemed more interested in placing "poison pills" and renewing reckless threats to withdraw entirely from this mutually beneficial trade agreement, rather than working with our global allies and neighbors to find solutions that directly aids American production and labor.

"I highlighted to the president how we disagreed, vehemently, with Commerce's decision to bring in countervailing and anti-dumping duties against Bombardier", Trudeau told reporters following talks with US President Donald Trump. The question now becomes are we going to be the country that leads this shift?

"There's a path to be optimistic here and, you know, maybe he'll come around", Morneau said, an apparent reference to Trump.

The prime minister arrives in Mexico looking for a friendly ear in President Enrique Pena Nieto, himself no stranger to hostility from the Trump administration, who will receive Trudeau at the presidential palace with military honors. Replying to a question, Trump said he would consider a trade pact with Canada minus Mexico, adding that both the United States and Canada wanted to protect their workers.

But Mexico has always been the lone developing country in the trade pact, with wages that are significantly lower than in Canada or the U.S. Critics say this fact gives Mexico an unfair advantage in NAFTA - a criticism that President Trump has echoed.

More news: Pre-release Google Home Mini goes rogue, starts recording 24/7

"It's possible we won't be able to make a deal, and it's possible that we will". Both leaders are keen to see talks succeed.

Canada is the number one export destination for most American states, and cross-border trade and investment support almost nine million jobs in the United States.

Britain is now negotiating the terms of its divorce from the European Union though Prime Minister Theresa May is pushing to move onto discussions about a major free trade deal with the world's biggest trading bloc.

Without NAFTA, Mexico trade experts say US products would face higher tariffs to enter Mexico, which could further skew the trade balance.

"I think it's been clear that circumstances are often challenging, and we have to be ready for anything — and we are", Trudeau said. It's time after all of these years and we'll see what happens.

More news: Trump suggests 'Liddle' Sen. Bob Corker was 'made to sound a fool'

Current NAFTA rules require cars have at least 62.5 percent of their parts made in the U.S., Canada or Mexico.

The rules of origin demands are among several conditions that the U.S. Chamber of Commerce has labeled "poison pill proposals" that threaten to torpedo the talks. Under the USA proposal, America would require more to be made in the country and less sourced from other members of the block.

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

Americans", she said, and acknowledged that changes to the deal would "of course be opposed by entrenched Washington lobbyists and trade associations.

More news: EasyJet plc (EZJ) Receives "Hold" Rating from Investec