U.S. Touts NAFTA Progress with Mexico, Not Canada

02:45PM Feb 13, 2018
President Trump says there's progress in NAFTA talks with Mexico but challenges exist with Canada
( MGN )

(Bloomberg) -- The Trump administration is once again signaling trade talks are going better with Mexico than Canada.

The U.S. is making “headway” in its efforts to renegotiate the North American Free Trade agreement, Trade Representative Robert Lighthizer said on Tuesday. Talks are going well, “particularly with the Mexicans.”

Lighthizer reserved his sharpest words for Canada at the last round of Nafta negotiations in January. He dismissed a Canadian proposal on cars as vague and sparred with Canada over data describing two-way trade flows. He also criticized a trade case filed by Canada against the U.S. at the World Trade Organization as a “massive attack” on American trade law.

Less than a week later, Canadian Prime Minister Justin Trudeau in some of his most aggressive language yet said he’d rather walk away from Nafta than accept a bad deal.

Canada’s chief Nafta negotiator Steve Verheul also took aim at the U.S. on Tuesday, saying there’s been “fairly limited progress overall” and that some U.S. proposals wouldn’t even be good for the U.S., let alone the other countries. “We have seen limited U.S. flexibility even on fairly easy issues,” he said. “This is being driven from the top.”

Surprising Turn

It’s a surprising turn of events given that the U.S. initiated the Nafta revamp last year by saying it wanted to address its gaping trade deficit with Mexico, while only seeking tweaks to the trading terms with Canada. Relations between the U.S. and Mexico were frosty when the talks started in August as Trump kept insisting Mexican President Enrique Pena Nieto’s government would pay for a southern border wall.

Mexico also appeared to be in the U.S. sights because of Trump’s goal to eliminate trade deficits. The U.S.’s second-biggest trade gap, after China, is with Mexico, with the deficit in goods expanding to $71.1 billion last year from $64.4 billion a year earlier.

Speaking at the same meeting on trade with Lighthizer and a bipartisan group of lawmakers in Washington on Tuesday, Trump also struck out at Canada over trade. Canada has treated the U.S. “very unfairly” over lumber, and acted poorly toward farmers in Wisconsin, Trump said.

Lighthizer’s office said last week that the U.S. objective is to renegotiate Nafta on a trilateral basis.


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