Trump warns it's 'possible' the USA will drop out of Nafta

Friday, 13 Oct, 2017

Despite rhetoric that the United States might pull out of the North American Free Trade Agreement, there will be substantial pressure from American businesses to forge a deal to remain, says NAFTA expert and Vanderbilt University professor Timothy Meyer.

Mexico's foreign relations secretary says his country won't accept "limited, managed trade", an apparent reference to demands for higher USA and regional content rules on products like auto parts. "I'm of the view that over the long term, because trade has been so beneficial for everyone, that we will get through periods of question".

On Friday, Ohio Senator Sherrod Brown offered his support, saying it was "about time" U.S. trade negotiators "took the pen away from corporate lobbyists and started writing trade policy that puts American workers first".

"There's a path to be optimistic", he said.

"We are much worse off with a bad deal than without a deal", said Guillermo Vogel, Vice President of Steelmaker Tenaris, who co-hosted a meeting of Mexican and U.S. business leaders in Mexico City aimed at pursuing strategies of defending NAFTA.

"Despite the non-cooperative approach to some of our Administration's policy proposals, our counterparts in Mexico and Canada are still negotiating with us in full faith".

"Even worse, withdrawal from NAFTA would put at stake millions of American jobs in every sector of the US economy, the competitiveness of USA -produced goods and services, and our country's standing as a global economic leader", Bolten said.

Alfredo Coutino, Latin America director at Moody's Analytics, wrote in a report that the probability of a breakup of the 1994 trade agreement has increased. The US president has made revamping the trade pact with its neighbors and reducing the country's trade deficit a pillar of his nationalist economic agenda.

"U.S. negotiators have made conditions so tough that Mexico and Canada could reject them, which would be the flawless excuse for the USA government to announce its departure from NAFTA", Coutino wrote.

The rules of origin demands are among several conditions that the U.S. Chamber of Commerce has labeled "poison pill proposals" that threaten to torpedo the talks. Mexican Foreign Minister Luis Videgaray, speaking ahead of the latest round of talks, said terminating Nafta could harm US-Mexico relations and damage co-operation on issues like fighting drug-trafficking. Those "could doom the entire deal", Thomas Donohue, the Chamber's CEO said October 11.

Mexico has been more assertive with Washington, talking openly about abandoning NAFTA if need be or slashing imports of USA grain. USA negotiators have countered with a proposal that would effectively grant the other countries less access, people familiar with the talks say.

Current NAFTA rules require cars have at least 62.5 percent of their parts made in the U.S., Canada or Mexico.

If the North American Free Trade Agreement survives the renegotiation effort, The United Kingdom may be interested in joining the pact.

Americans", she said, and acknowledged that changes to the deal would "of course be opposed by entrenched Washington lobbyists and trade associations.