Canada's Latest Effort To Save NAFTA Is Sure To Work

Frederick Owens
January 11, 2018

It was also announced Wednesday that Canada had filed a complaint with the World Trade Organization (WTO), claiming the USA had committed almost 200 violations of global trade rules.

Canadian government officials said there's an increasing likelihood US President Donald Trump will give six-months' notice to withdraw from Nafta, dragging down the loonie, yields on government bonds and Mexico's peso.

"Despite the uncertainty surrounding NAFTA and rumors Mexico wouldn't be able to continue exporting to the United States, it's important to note that not only did we hit a record in exports but we also had record export numbers to the United States with almost 10 percent growth", AMIA President Eduardo Solis said.

The Canadian dollar rose 4.2 cents to 0.79.74 US dollar.

The comments have raised worries the Nafta countries - the US, Canada and Mexico, who trade more than US$1 trillion annually - are further apart on coming to an agreement than feared.

The three NAFTA countries are set to meet for a sixth round of negotiations later in January, and Trump has maintained if the US can't get a better deal, he will withdraw from the pact completely.

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Last fall, U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerMORE tried to calm concerns about a withdrawal, saying the Trump administration had every intention of completing the negotiation of an updated NAFTA with Mexico and Canada.

Laura Dawson, the director of the Canada Institute at the Wilson Centre in Washington, said it should come as no surprise that Trump is prepared to use the threat of withdrawal as a negotiating tactic.

As word of the news spread, the Canadian dollar fell 0.8 percent to CAN$1.2567, its lowest level of the year.

"The Canadian government is aware of the possibility that President Trump may announce the United States' withdrawal from NAFTA", a senior government official said on condition of anonymity.

"On NAFTA, I'm working very hard to get a better deal for our country and for our farmers and for our manufacturers", Trump said.

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