Talks with Canadian officials expected after US-Mexico deal

Evan Vucci  AP

Evan Vucci AP

Foreign Minister Chrystia Freeland was on her way to Washington. "A lot of people thought we'd never get here, because we all negotiate tough", Trump said as he walked into the Oval Office and took his seat behind the Resolute Desk.

"It's quite clear that the White House wants Canada to feel the heat of a threatened auto tariff and is going to try to seek some visible concessions from Canada relative to what's in the existing NAFTA deal", he said.

Freeland is under increasing domestic pressure not to compromise.

FILE - President Donald Trump talks with Canadian Prime Minister Justin Trudeau during a G-7 Summit welcome ceremony. Congress would then have an additional 90 days to review any new agreements replacing Nafta. Moreover, the United States might first have to drop its higher tariffs on steel and aluminum imposed on Canada and Mexico earlier this year. The two sides agreed to stricter rules for Mexican auto exports to the United States, including requirements that 75 percent of the content be made in North America, and that 40 to 45 percent of the content be made with workers earning at least $16 (€13.7) per hour - a measure aimed at discouraging manufacturers from relocating to lower-wage Mexico.

Instead, senior USA officials told reporters the agreement had been extended for 16 years but would be reviewed every six years.

Auto-immunity: Per Reuters, the agreement helps resolve one of the stickiest issues that arose under NAFTA surrounding the rules of origins for cars, which required that a certain percentage of vehicle parts be from countries within the NAFTA region in order to avoid tariffs.

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At the time he also vowed to leave the spotlight, saying: "I will now step back and take a long time to listen". ET for a 15-minute set but did not address or mention the allegations, according to The New York Times .

It contains enforceable labor provisions that require Mexico to adhere to International Labor Organization labor rights standards in an effort to drive Mexican wages higher. It plays a major role in the U.S./ Canada/ Mexico trade agreement, earning the nickname "the NAFTA Superhighway".

The 24-year-old NAFTA is a trilateral deal between the United States, Canada and Mexico that underpins $1.2 trillion in North American Trade.

Former U.S. ambassador to Canada Bruce Heyman described Donald Trump as "the arsonist that becomes the firefighter" when it comes to the president's dealmaking rhetoric. But the country has in the past insisted that it would not be bullied into accepting a deal without working through its areas of concern and it seems likely the Friday deadline will pass without a new agreement in place.

"They used to call it NAFTA", Trump said. But administration officials said Monday there's no reason Congress couldn't approve a two-way deal with Mexico, if necessary. Clearly, the administration hopes this would keep US manufacturers from moving south of the border. In 2017, trade between the United States and Mexico totaled $615.9 billion in goods and services. Now, the US could use its new tariffs on lumber as a negotiating tool to provide leverage in that dispute. Canada imposed tariffs on $12.5 billion of U.S. goods, including steel, toffee, maple syrup, coffee beans and strawberry jam. That plan was vehemently opposed by Mexico, Canada and the auto industry.

On Monday, the Trump administration and Mexico announced a compromise on that divisive issue: An overhauled NAFTA would remain in force for 16 years.

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