Canada welcomes Trump talk of possible NAFTA deadline extension


Canada on Friday welcomed U.S. President Donald Trump's suggestion that talks to modernize NAFTA could be extended beyond the end-March deadline, a move which might help break a deadlock at the negotiations, Foreign Minister Chrystia Freeland said.

Trump - who has long threatened to walk away from the 1994 North American Free Trade Agreement unless major changes are made - told the Wall Street Journal on Thursday that "a lot of things are hard to negotiate" ahead of a Mexican presidential election in July.

"I thought that was a sensible suggestion from the president. I think all of us are mindful of the Mexican elections," Freeland told reporters on the sidelines of a cabinet retreat.

She made her remarks amid signs that Canada and Mexico might be prepared to reverse their steadfast opposition to several U.S. hard line demands for changes to NAFTA.

Markets are nervous about the prospects of disruption to the highly integrated North American economy. The Canadian and Mexican currencies fell on Wednesday after Reuters cited Canadian sources as saying they were increasingly convinced Trump would announce plans for a withdrawal.

Prime Minister Justin Trudeau later told reporters that he was optimistic the three nations would be able to agree on improvements to NAFTA while reiterating Canada's stance that "we will not accept just any deal".

In his remarks on Thursday, Trump repeated he was ready to announce a U.S. withdrawal unless major changes are made but said he was "leaving it a little bit flexible" until after the Mexican election.

"We have always felt that imposing artificial deadlines was not necessary from the Canadian standpoint ... I thought that was a constructive proposal from the president," said Freeland.

A Canadian source familiar with the talks said officials had been talking informally for weeks about the possibility of suspending the process this year but stressed no decisions had been made.

Canada and Mexico oppose U.S. demands to establish rules of origin for NAFTA goods that would set minimum levels of U.S. content for autos, a sunset clause that would terminate the deal if it is not renegotiated every five years and ending the so-called Chapter 19 dispute mechanism.

Freeland said on Thursday that Canada had come up with some creative ideas in a bid to unblock the talks.

Sources said some of the Canadian proposals related to autos content, an area where Mexico has recently indicated there might be room for compromise.

© (c) Copyright Thomson Reuters 2018.

©2018 GPlusMedia Inc.

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A large number of US states count Canada as their largest trade partner. If NAFTA is cancelled by Trump, his ignorance will hurt and disrupt as many businesses in the US as Canada. It has taken decades for this economic integration to develop. It would be a tragedy to disrupt it for stupid political ideology that does not have any basis in economic reality. There are enough real problems in this world to deal with. Please don’t destroy an economic relationship that benefits both countries equally.

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Personally, I think that Canada and Mexico should not compromise. If Trump walks away, he walks away. If Canada is smart, they'll start pushing for a single trading block (CANZUK) with OZ, NZ, and the UK. When CANZUK is in place, the US will be far more receptive to a trade deal that benefits Canada as well to get into that market. The same goes for the UK and its negocitations with the EU. If CANZUK happens, the US will NEVER be able to push Canada around or treat it like an inferior partner.

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