Trump risks backlash in farm belt states if NAFTA gets scrapped

  • Trump risks backlash in farm belt states if NAFTA gets scrapped

Trump risks backlash in farm belt states if NAFTA gets scrapped

Aug 23 (Reuters) - U.S. stocks were set to open lower on Wednesday as investors pulled back after President Donald Trump warned of a government shutdown to build a Mexico border wall and threatened to terminate a trade agreement with Mexico and Canada.

The first round of negotiations aimed at renewing the North American Free Trade Agreement concluded Sunday.

The United States buys more goods made in Canada and Mexico than they buy from us, and US Trade Rep. Robert Lighthizer, the highest-ranking American official at the talks, said such deficits "can't continue". The U.S. took a tough stance at the meeting, telling Canada and Mexico that NAFTA had "fundamentally failed" for many Americans.

The Trade Campaigner for the Council, Sujata Dey points out other concerns, "It is very risky that the Liberal government is going to put CETA procurement provisions in NAFTA, which will get rid of buy local policies".

As negotiations on a NAFTA overhaul began last week in Washington, there was wide agreement on the need to modernize the pact to reflect changes over the past two decades, such as the rise of e-commerce.

"Navistar recently began to export used heavy-duty trucks to Mexico and we intend to increase quantities in the years ahead", Jim Spangler, vice president of corporate affairs for Navistar, said in a letter to the USA trade representative.

"He's negotiating in his own particular style", he told Mexican television.

Those numbers include products that travelled though the U.S., Mexico and Yukon and on to other destinations.

It's conceivable, but not likely in Ujczo's view, that American negotiators could use the notice to signal to their NAFTA partners that they might be flexible on expanding procurement, depending on the feedback they get from industry. With producers facing low commodity prices and other challenges, we can not afford to cause further harm by negating the gains made under NAFTA.

To protect domestic manufacturers, trade negotiators want to raise the minimum requirements for the amount of parts sourced in North America and in the U.S. But it was the first time he made the threat since negotiations started, analysts said. "Congress has not repealed that legislation, and they've given no indication they intend to".

Overall, we must move through this process quickly. For Christine St-Pierre, minister of worldwide Relations and the Francophonie, "there is what Mr. Trump says, and there are people at the table of negotiations".

Barbara Dunlop, director of policy, planning and communications for the Department of Economic Development said the government needs to get a better sense of what is going to be discussed at the negotiation table. This has caused understandable concern for producers, but if the US maintains the right priorities in these negotiations, the agriculture industry can benefit from an updated agreement.