Trump Says New Trade Deal with Canada Could Exclude Mexico

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Mexico appears to be preparing for the worst as the fourth round of talks on the North American Free Trade Agreement open in Washington DC.

Trudeau joined Trump in the Oval Office at the start of a new round of talks over the North American Free Trade Agreement, which the USA president has threatened to withdraw from if he can't negotiate a better agreement with Canada and Mexico. "Withdrawing from the agreement also risks a prolonged legal fight over whether the president can exit from the agreement without congressional consent". Speaking in Mexico on Tuesday, the president of the U.S. Chamber of Commerce, Thomas J. Donohue, said the negotiations had "reached a critical moment".

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. Mexico could leave NAFTA and have the strength to move on without any serious long-term structural damage to the economy, he said.

Mexican Foreign Minister Luis Videgaray warned that an end to NAFTA would mark a breaking point in U.S.

The updated provisions on competition will allow for more "procedural fairness" in the enforcement of competition law, the statement said.

The U.S. side sees strengthening the rules of origin for the auto industry as a way to bring back automotive production and jobs from Asia.

One of the most contentious USA proposals is around so-called rules of origin for vehicles, which govern what share of a auto must be built within NAFTA countries to receive the pact's benefits.

NAFTA negotiators face tough new USA demands to increase regional content for autos to 85 percent from 62.5 percent, with 50 percent from the United States, according to people briefed on the plan.

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According to a schedule seen by Reuters, meetings on government procurement, cross-border services trade, environmental issues and state-owned enterprises were set to conclude for the current round on Thursday.

The auto parts study was conducted before these targets were revealed.

The former House speaker and friend of the president says a deal will eventually be reached, after long and hard negotiations.

Finance Minister Bill Morneau, in Washington for meetings with G20 finance ministers and the International Monetary Fund, was confronted Thursday with several questions about a possible USA exit from NAFTA. "Previous trade agreements have failed to adequately protect American workers".

"These will be met with widespread opposition from Canada and Mexico". Bombardier is a significant employer in Northern Ireland and Canada.

Phil Levy, senior fellow at the Chicago Council on Global Affairs, pegs the chance of NAFTA's survival at less than 50 percent. "They're going to do well".

The former Conservative leader, who's known as an ardent free trader, says powerful anti-trade forces that predate Trump's presidency are at play in American society and aren't going away anytime soon.

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