Prime Minister Justin Trudeau is heading to Mexico Thursday as tensions between leaders involved in the North American Free Trade Agreement renegotiation grows.
Trudeau is meeting with the Mexican President Enrique Pena Nieto, to discuss the agreement, a day after talking in Washington, D.C., with U.S. President Donald Trump.
During the discussions, Trump raised the possibility of a bilateral deal between Canada and the U.S. and completely getting rid of NAFTA if a three-way deal cannot be reached.
The fourth round of renegotiations for NAFTA kicked off this week and Mexican leaders have signalled they don’t like some of what’s on the table. In the renegotiation, the U.S. is seeking to strengthen its rules of origin for the auto industry as a way to bring back some auto parts production, including electronics, from Asia.
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But Mexico strongly opposes a U.S., specific content requirement, which would limit the growth of its own car industry.
Asked by a reporter if he could envision maintaining free trade with Canada if NAFTA talks sour with Mexico, Trump said: “Oh sure, absolutely. It’s possible we won’t be able to reach a deal with one or the other, but in the meantime, we’ll make a deal with one, but I think we have a chance to do something very creative that’s good for Canada, Mexico and the United States.”
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Trump added that a “very creative” deal was still possible to benefit all three countries.
In response, Trudeau said Canada has to be “ready for anything” and realized many paths could be taken. But for now, he said he remains optimistic NAFTA is the best for all three countries.
Other U.S. proposals opposed by Canada, Mexico and U.S. business interests include the five-year sunset provision, radical changes to NAFTA’s dispute arbitration systems, changes to intellectual property provisions and new protections for U.S. seasonal produce growers.
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*With files from the Canadian Press and NAFTA
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