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Abu Dhabi, UAEWednesday 26 September 2018

US and Canada to resume Nafta talks despite Trump inflammatory remarks

Talks were “constructive” but no deal was reached, says US trade representative  

Donald Trump has postponed a summit with Gulf and other regional allies to 2019. Reuters
Donald Trump has postponed a summit with Gulf and other regional allies to 2019. Reuters

The US and Canada were unable to reach a deal to revamp the North American Free Trade Agreement (Nafta) on Friday – the informal deadline for negotiations given by President Donald Trump – and talks will resume next week, despite secret inflammatory remarks from the American leader regarding the neighbouring country.

“Today the President notified Congress of his intent to sign a trade agreement with Mexico – and Canada, if it is willing – 90 days from now,” said according to a statement from the US trade representative, Robert Lighthizer.

On Monday the US government and Mexico agreed on a preliminary bilateral deal that overrides the previous trilateral pact that governs $1 trillion of trade between the United States, Mexico and Canada. The agreement between Mexico and the US implements changes to the 24-year-old Nafta with respect to cars, intellectual property, labour, digital trade and manufacturing. Washington has pledged to continue without Canada if a deal could not be reached with its neighbour.

Nafta's future has been in doubt ever since Mr Trump took office, as he pledged during his electoral campaign to either renegotiate or scrap it. It is one of three trade issues on which the American leader's protectionist stance is threatening the future of trade relations, with implications for the global economy. The others are the US-China tariff war, which has led to the imposition of steep duties on imports from each country, and increasingly uncertain trade relations between the US and the European Union.

“Over the next few weeks, Congress and cleared advisors from civil society and the private sector will be able to examine the agreement. They will find it has huge benefits for our workers, farmers, ranchers, and businesses," added Mr Lighthizer. American unions have not fully endorsed the agreement with Mexico.

Though Mr Lighthizer said year-long talks with Ottawa have been “constructive” and officials are set to meet with Canadian foreign affairs minister Chrystia Freeland next Wednesday, Canada’s Toronto Star published off-the-record comments with Mr Trump telling Bloomberg News he is not making any compromises at all with Canada and that he could not say this publicly because “it’s going to be so insulting they’re not going to be able to make a deal.”

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Bloomberg agreed to Mr Trump’s request to keep the comments off the record. But the Star said it obtained the quotes from a source and is not bound by any promises Bloomberg made to the president. It published the quotes after they became part of the critical negotiations, it wrote. President Trump then corroborated the quotes in a tweet on Friday evening.

In another off-the-record comment Trump said that any deal with Canada would be “totally on our terms”, according to the Star. He hinted at plans to impose tariffs on imports of Canadian-made cars if Canada refused to comply with his terms.

“Off the record…every time we have a problem with a point, I just put up a picture of a Chevrolet Impala,” he said. The car is produced at General Motors Ontario plant.

Mr Trump's comments have been viewed by Canadian negotiators as evidence that the US has not made a legitimate effort to compromise during the year-long talks.

Canadian Prime Minister Justin Trudeau’s officials reportedly confronted President Trump’s officials with the leaked quotes at a meeting on Friday morning. Negotiations with Canada dramatically ended on Friday morning after the secret comments made by President Trump were leaked to the media on Thursday.

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