Canada tamps down worries about US NAFTA withdrawal

Canada tamps down worries about US NAFTA withdrawal
© Greg Nash

Canadian officials are tamping down speculation that President TrumpDonald John TrumpAdvisor: Sanders could beat Trump in Texas Bloomberg rips Sanders over Castro comments What coronavirus teaches us for preventing the next big bio threat MORE will soon withdraw the United States from the North American Free Trade Agreement (NAFTA).

A Canadian government official pushed back against a Reuters report, calling it “inaccurate” that the Government of Canada is “convinced” the U.S will soon pull out of NAFTA.

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“Progress on NAFTA was made during previous rounds and the December intersessional and we expect more progress to be made in January,” the official said.

Canadian officials say they expect contentious issues as part of any trade negotiation but are ready to work with the U.S. and Mexico toward an updated NAFTA.

The sixth round of talks is set to begin Jan. 23 in Montreal. Trade officials from Mexico, Canada and the United States have put a March deadline on completing negotiations on NAFTA.

A report earlier on Wednesday said that two government sources had expressed concern that Canadian officials were becoming convinced that Trump would leave the 24-year-old agreement.

Soon after the story, the Toronto Star reported that while Canada is "actively preparing" for a possible withdrawal, officials aren't "convinced" that Trump will abandon the agreement.

Withdrawal from the three-nation deal would take six months and would likely raise tariffs on U.S. exports headed north and south. 

Trump has said many times he would pull the nation out of the NAFTA deal if he couldn't see a way make the deal fairer for the United States. 

The report briefly roiled the Canadian dollar and stocks and pushed down the Mexico peso — providing a look into what might happen if Trump follows through on his previous threats to leave NAFTA.

Last fall, U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerGOP senator warns quick vote on new NAFTA would be 'huge mistake' Pelosi casts doubt on USMCA deal in 2019 Pelosi sounds hopeful on new NAFTA deal despite tensions with White House MORE tried to calm concerns about a withdrawal, saying the Trump administration had every intention of completing the negotiation of an updated NAFTA with Mexico and Canada.

Trump fell short Monday on making any firm promises that a NAFTA update could be done, although he told farmers he wanted a better deal for them during remarks to the American Farm Bureau Federation convention in Nashville, Tenn.

"On NAFTA, I’m working very hard to get a better deal for our country and for our farmers and for our manufacturers," Trump said. 

"It's under negotiation as we speak," he said. "But think of it: When Mexico is making all of that money, when Canada is making all of that money, it's not the easiest negotiation. But we're going to make it fair for you people again."

Still, the remarks lacked any defense of the pact and didn't erase the notion that Trump may, at any point, decide to ditch the deal.

Lawmakers on Capitol Hill, like Senate Agriculture Committee Chairman Pat RobertsCharles (Pat) Patrick RobertsOn the Trail: Senate GOP hopefuls tie themselves to Trump Kobach says he discussed his Senate bid with Trump Republicans expect Trump to withdraw controversial Fed nominee MORE (R-Kan.), who traveled with the president to Tennessee, has been part of a group pressing the president to stick with the NAFTA negotiations.

To add to the pressure, U.S. Chamber of Commerce President Tom Donohue said Wednesday that not completing a NAFTA upgrade would be a "grave mistake" and would undermine the economy's momentum.