Trudeau, Trump discuss trade as White House vows NAFTA renegotiation

Trump by Joshua Roberts  Reuters

Trump spoke with Nieto on Saturday, who called the new president to offer congratulations. Trump "should know and Canadians should know that we think the project is good for Canada", he added.

Trump is scheduled to meet in person with Mexico's Peña Nieto on January 31, when the two leaders will have a long list of issues to discuss.

But Canada may well go its own way to protect its own interests with regard to its trade relationship with the U.S.

But it doesn't really fit with the new Trump Administration's expressed theories about trade and economic policy.

The problem is that could clash with another major aspect of Mr. Trump's trade policy: undoing USA trade deficits.

"It is possible that those two countries [Canada and Mexico] will offer concessions, not unlike Japan's pragmatic response to the US protectionist push in the 1980s", said Paul Ashworth, chief USA economist at Capital Economics. Mr Trump has also threatened GM and Toyota with a "big border tax" if the companies export Mexican-assembled vehicles into America.

Setting aside that this statement is wrong and has been demonstrated to be wrong time and time again, here's what it likely means. NRDC joined with these groups to oppose TPP as the final agreement "would allow foreign corporations to challenge our health, safety and environmental protections in a foreign tribunal outside our legal system, and it would weaken those bedrock safeguards in the United States".

In 1992, opponents of the North American Free Trade Agreement were quite sure the sky was going to fall on our heads if Canada approved the multilateral trade deal. "If the US leaves NAFTA, companies in Mexico and Canada may seek alternate, more affordable places to purchase these goods, such as China, India, and other regions with large, global USA competitors", the report states.

During a Monday interview with the El Universal newspaper, Economy Minister Ildefonso Guajardo said that, "If there is any action that punishes imports to the North American market and encourages United States exports, you have to reflect it in a mirror action to counteract the change of incentives that this would make for activity and investment in Mexico". Automakers, on their part, have announced plans to invest in the United States by expanding capacity in the U.S rather than Mexico. Who can forget the memorable Liberal TV ad during the 1988 federal election campaign that depicted a fast-talking American negotiator erasing the Canada-U.S. border on a crudely presented map?

It helps explain why Trump has for weeks sounded markedly less friendly to China than have previous presidents.

And Canada? This country had two-way goods trade with the United States worth $575-billion in 2015, but in nearly even measure, a deficit for America of just $15-billion.

An estimated nine million jobs in 35 states depend on exports to Canada.

Any move by the United States to withdraw from NAFTA or to otherwise restrict automotive vehicle, parts and components trade within North America will result in higher costs to producers, lower returns for investors, fewer choices for consumers, and a less competitive US automotive and supplier industry. But we are too good and reliable a client to become a target ourselves.

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