Trump: ‘Good chance’ on NAFTA

U.S. President Donald Trump joined Canadian and Mexican officials in striking an upbeat tone on the North American Free Trade Agreement, with one country’s top negotiator saying talks have been constructive on divisive issues.

“Will it be renegotiated? We’re trying right now,” Trump said in an interview Thursday on CNBC from the World Economic Forum in Davos, Switzerland. “I think we have a good chance, but we’ll see what happens.”

Trump’s comments came as his trade representative, Robert Lighthizer, held a detailed NAFTA meeting at the Swiss ski resort with Canadian Foreign Minister Chrystia Freeland.

Also Thursday in Davos, U.S. Treasury Secretary Steve Mnuchin said the United States is ready to negotiate an “attractive” trade deal with Britain once the country has left the European Union.

At the World Economic Forum, Mnuchin said the United States is first looking to see a “successful transition that’s good for the U.K., good for the markets.”

The British government is about to begin discussions about the future relationship with the EU after its exit. First it’s looking to agree on a transition period after the exit in March 2019 that makes the exit less abrupt.

While within the EU, the U.K. cannot negotiate separate trade deals with other countries.

He added that Trump has already said Britain will be at the “front of the line” in trade

negotiations.

Freeland and Mexican Economy Minister Ildefonso Guajardo gave their own signals of cautious optimism during a Davos panel discussion. Freeland said talks on complex issues shouldn’t be rushed, and Canada is prepared for any eventuality on NAFTA. Guajardo reiterated a willingness to compromise on the key issue of automobiles.

“Today we are in much better standing than a year ago to try to find those creative solutions that will mean a win-winwin for the three countries,” Guajardo said.

The ministers spoke as their negotiating teams worked in Montreal during the sixth round of NAFTA talks. Lighthizer, Freeland and Guajardo

will meet Monday in Montreal to close out the round, a pivotal gathering where progress will determine the likelihood of reaching a deal to prevent Trump from abandoning the pact.

Speaking from Montreal during a break in talks on Thursday, Canada’s chief negotiator, Steve Verheul, said discussions “went reasonably well” with the United States on automotive rules of origin, which govern what share of a car must be made in the three countries to be traded freely within the zone. Canada had presented what it called “new ideas” related to how a car’s value is calculated.

“The mood is still reasonably constructive,” Verheul said.

NAFTA talks on the automotive industry revolve around the U.S. demand to increase the rules of origin. Mexico’s Guajardo

said the threshold must increase gradually, to give companies time to adapt.

The United States also had some “positive things to say” about a Canadian idea to add a clause that would force nations to review NAFTA periodically, Verheul said. The proposal came after the United States pitched a so-called sunset clause that would automatically kill the pact after five years unless all three countries vote to extend it.

Lighthizer and Freeland discussed the auto rules, sunset clause and investor dispute panels during their private meeting Thursday in Davos, according to a Canadian government official who spoke on condition of anonymity.

In her panel discussion, Freeland said NAFTA talks will be a success if they cut red tape and lead to more companies taking advantage of the accord,

as 40 percent of Canadian exporters to the United States don’t bother using NAFTA because of the regulatory burden. She cautioned against moving too quickly, particularly on discussions around “insanely complicated” automotive rules.

NAFTA talks began in August and are to run through March, with the seventh round expected in late February in Mexico City. Trump had initially wanted a deal by December, though trade negotiations of this scale typically take years.

Michael Sabia, chief executive officer of Canadian investment management firm Caisse de Depot et Placement du Quebec, said negotiators should focus more on getting things right than striking a quick agreement.

“We’ve got to get the right deal, not just any deal,” he told Bloomberg TV on Thursday.