U.S. President Donald Trump has threatened to scrap NAFTA without major changes to reduce U.S. goods trade deficits with its North American neighbors, describing it as a disaster that cost Americans hundreds of thousands of manufacturing jobs.
"Mexico's negotiating strengths stem from the deep economic integration between the United States and Mexico, and the negative impact that a disruption in supply chains and trade flows would have to key components of the U.S. economy", BMI said Wednesday in a note to clients. Many smaller US companies have been able to compete and survive by outsourcing production of some components. As we said in our June editorial, data from the Minnesota Department of Employment and Economic Development shows that Canada and Mexico now account for one-third of our state's $19 billion in annual exports.
In April Premier Sandy Silver promised to brief both opposition leaders on topics related to NAFTA. A common topic of hallway chatter at last week's first round of talks last week was just when he might deploy that withdrawal threat, which many view as his principal source of negotiating leverage.
"Trump had said from early days that he would end the NAFTA agreement if he couldn't get more beneficial terms for the USA, and reminding the audience of that he added, "...but we're going to see what happens".
Ujczo, who has clients in both Canada and the USA, said Canadian provinces would be better off trying to negotiate reciprocal procurement agreements with individual states, through which most federal money for infrastructure flows. They said they would like to build on the original agreement's success by looking for ways to increase trade volumes.
"Ultimately, I don't think markets care that much about the noise coming out of Washington, D.C. but they're trying to translate what that noise means for the potential for tax reform".
"We need to prepare for what we would do if NAFTA isn't there", said Hoback.
Lighthizer said the administration's goals are to protect digital trade and services, e-commerce, update customs procedures, protect intellectual property, improve energy provisions, enhance transparency rules and promote science-based agricultural trade. Victims of unfair trade practices should have access to trade remedies, he said. Trump said Tuesday night. US -produced pork also is a major export to Mexico and Canada.
For soybeans, about 45 percent of the USA crop is exported on average and Mexico is one of the major markets along with China. The U.S. reportedly tabled roughly 10 proposals updating existing chapters or proposing new ones.
The five full days of NAFTA meetings saw negotiating teams led by United States Trade Representative Robert Lighthizer, Canadian Foreign Affairs Minister Chrystia Freeland and Mexican Secretary of the Economy Ildefonso Guajardo cover more than two dozen different negotiation topics.
Negotiations will move to Canada in late September and return to the U.S.in late October.