Canada, Mex­ico ready to talk about NAFTA with US

Kuwait Times - - BUSINESS -

OT­TAWA: Canada and Mex­ico agreed Thurs­day to US Pres­i­dent-elect Don­ald Trump’s de­mand to have a fresh look at their tri­par­tite 22-year-old free trade pact, fear­ing they could be shut out of the US mar­ket. But the two US al­lies di­verged on the level of changes to the North Amer­i­can Free Trade Agree­ment (NAFTA) each was will­ing to ac­cept, with Mex­ico tak­ing a harder line. The 1994 trade pact be­came a source of fric­tion with Amer­ica’s neigh­bors dur­ing the cam­paign when Trump called NAFTA the worst trade deal the United States has ever signed.

The Repub­li­can pres­i­dent-elect’s pro­tec­tion­ist no­tions to repa­tri­ate Amer­i­can jobs lost to free trade sent shock­waves through Canada and Mex­ico’s economies, which both rely heav­ily on ex­ports to the United States. “I think it’s im­por­tant that we be open to talk­ing about trade deals,” Cana­dian Prime Min­is­ter Justin Trudeau - a fierce de­fender of free trade - said Thurs­day. “If the Amer­i­cans want to talk about NAFTA, I’m more than happy to talk about it,” he said.

Mex­ico’s For­eign Min­is­ter Clau­dia Ruiz Massieu, mean­while, said her gov­ern­ment was will­ing to seek to “mod­ern­ize” NAFTA with Trump’s in­com­ing ad­min­is­tra­tion and Canada, but not ready to start from scratch. “We are will­ing to talk about this with the new gov­ern­ment and with Canada as well,” Ruiz Massieu told CNN. “We think it is an op­por­tu­nity to think if we should mod­ern­ize it - not rene­go­ti­ate it, but to mod­ern­ize it,” she in­sisted.

Ruiz Massieu said NAFTA would be dis­cussed with Trump’s tran­si­tion team in the com­ing months. Trump has also agreed to meet with Mex­i­can Pres­i­dent En­rique Pena Ni­eto, pos­si­bly be­fore the New York bil­lion­aire’s in­au­gu­ra­tion in Jan­uary. Trudeau has mean­while pledged to work closely with the new US leader.

530 Mil­lion Con­sumers

NAFTA cre­ated a con­ti­nen­tal mar­ket with 530 mil­lion con­sumers in Canada, the United States and Mex­ico. Twoway trade in goods be­tween Mex­ico and the United States to­talled about US$1.5 bil­lion daily in 2015, while bi­lat­eral trade cross­ing the US-Cana­dian border amounted to $1.8 bil­lion daily. The United States, how­ever, is a net loser in both cases, post­ing $15 bil­lion and $58 bil­lion trade deficits with Canada and Mex­ico, re­spec­tively, last year. Ruiz Massieu said Mex­ico “be­lieves in free trade” and the gov­ern­ments “have the chal­lenge to make sure that the op­por­tu­ni­ties cre­ated by NAFTA are more in­clu­sive and that more peo­ple in the three coun­tries feel the ben­e­fit of this in­te­gra­tion agree­ment”. Trudeau said also that it was im­por­tant to pe­ri­od­i­cally re­assess trade deals to en­sure that they con­tinue to be of ben­e­fit to the mid­dle class.

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