Trudeau doesn't think Trump will pull U.S. out of Nafta


But following talks in Montreal last week, Canadian Prime Minister Justin Trudeau said Tuesday he didn't believe Trump would pull out because of the potential damage to US workers.

The automotive industry has been a thorny issue throughout the NAFTA talks taking place between Canada, the USA and Mexico, with American negotiators demanding more US content in North American made vehicles.

"You have the opportunity to unleash the American economy like no President has done before and fuel historic growth", the USA senators wrote to Trump in their January 30 letter. "This is an administration that is explicitly protectionist and, in many areas, the objective quite explicitly is to shrink the trading relationship". By the Canadians' own admission, they're conceptual.

"The heavier grades of crude oil imported to the USA from Canada are a necessary part of the US oil supply mix", said John Tintera, president of the energy alliance. NAFTA requires a vehicle to have a certain percentage of North American content in order to benefit from tariff exemptions, and the US has proposed raising the bar to 85% from 62.5% for a typical auto.

A large group of Republican senators including Majority Leader Mitch McConnell, R-Ky., wrote to President Donald Trump on Tuesday urging him not to withdraw from the North American Free Trade Agreement.

Regional content requirements - or rules of origin - are among the touchiest issues the countries are working through in revisiting the 24-year-old trade deal.

"How do you explain today a 4.1 per cent unemployment rate in the United States, and a similar rate in Canada and growing prosperity in Mexico?" he said. "Our goal must be a North America that is more competitive, more prosperous and more successful for all our citizens".

Without naming Mr. Trump, Ms. Freeland also slammed the brand of populism that forms the centre of his political message. In 2014, more than 125,000 small businesses exported $136 billion to Canada or Mexico. "The easy way to harness it is to point fingers at outsiders".

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While Trump said a year ago he was seeking to just tweak trade ties with Canada - and Mexico looked like the main target of a revamp - the positions have shifted.

"We do not see trade negotiations as a zero-sum game, where somebody loses and somebody wins", he explained. I think a win-win-win outcome can be achieved.

She said here in a press conference that concluding the deal as rapidly as possible would be for the best but that "uncertainty is never good".

And despite the wide philosophical distance, Ms. Freeland said she would assume the US has "positive intent" and push for a deal, even while preparing at least five contingency plans.

We believe strongly that today's sophisticated supply chains can not be uprooted overnight, which is why we are vocally supporting our customers so dependent on trade.

"That's how these things work", she said.

Ironically, given her remarkably candid comments, Ms. Freeland opened the event by invoking the confidentiality of NAFTA talks.

In addition to the general positive tone, there were indications from Mexican officials that the negotiations could extend beyond the previously expected drop-dead date at the end of March, when a national Mexican election cycle begins.