President Trump has told Canada that is must wait to re-enter NAFTA talks while hailing negotiations with Mexico as "coming along nicely". In a tweet last night trump said "Tariffs and trade barriers are far too high.
Discussions appear to have taken on a surprising urgency of late, with the USA focused on ironing out its differences with Mexico, while apparently freezing Canada out of the talks", ING analysts note. Will tax cars if we cant make a deal! he added.
Mexican Economy Minister Ildefonso Guajardo said that Mexico and the United States have "been making a lot of advancements" in their talks. Obrador, Mexico's first left-wing president in recent times, won't take office until December 1, and he's believed to be keen for the transitional government to clinch a deal with the United States before then so his party can maintain some distance from a revamped agreement. "We'll keep standing up for Canadian interests as we work toward a modernized trilateral NAFTA agreement".
Larry Kudlow, the White House economic adviser, said Trump doesn't want to withdraw from Nafta but "prefers bilateral negotiations" and wants to try a different approach.
These officials said U.S negotiators had essentially agreed that a new NAFTA trade deal would exempt existing Mexican auto plants from any "Section 232" tariffs that Trump may impose.
To complicate matters, the already rocky Canada-U.S. relationship has deteriorated since the partners suspended talks in the spring. It seems that new sticking points have emerged over Trump's threat to impose steep automotive tariffs.
Officials now are rushing to conclude the talks before Mexico's Lopez Obrador takes office on December 1. After all, auto tariffs could plunge Canada into a recession and put Prime Minister Justin Trudeau in a vulnerable position ahead of 2019 elections. But the US negotiators do not want to apply the same guarantees to new Mexican auto plants, the officials said, as the potential threat of 25-percent tariffs would discourage new automotive investment in Mexico to serve the USA market.
Canada could soon return to the talks, its ambassador to the U.S. said this week. He said they include dispute resolution, agriculture issues, intellectual property, government procurement, the proposed inclusion of a five-year sunset clause and the de minimis threshold, which is the maximum value of an item that Canadians can order from a foreign country without paying duties or taxes.