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13 January 2018, 03:57 | Erica Roy
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While the US has been clear there was a possibility it would withdraw from the agreement, Canadian officials believe a positive outcome is possible "if there is goodwill on all sides", Foreign Affairs Minister Chrystia Freeland told reporters Thursday.
Canada's federal cabinet ministers are trying to remain optimistic, amid reports government officials have rising fears US President Donald Trump may actually make good on his trade threats.
It is not certain the United States would quit NAFTA even if Trump gave the required six months' notice, since he is not obliged to act once the deadline runs out.
Ministers from Canada, Mexico and the United States will hold a special meeting to tackle some of the toughest issues in negotiations to update the North American Free Trade Agreement (NAFTA), a top private-sector adviser to the Mexican government said Thursday.
"I told the president that it would be a paradox of enormous irony that during this time when we passed the tax bill and we're experiencing economic growth, that we all of a sudden find ourselves in a foreign recession that could dry all that out", Roberts said. "I think it would be especially bad for this region because we're so closely integrated into the USA economy", said Anderson.
Canada is upset at USA tariffs imposed on imports of Canadian softwood lumber, newsprint and an nearly 300 percent duty on Canadian aerospace Bombardier CSeries aircraft. Trump would like to see up to 85 per cent of all components in autos being sourced from within the NAFTA region, with 50 per cent of the content coming from the U.S.
The U.S. dollar fell against a basket of major currencies but made a partial recovery after the Labor Department said its consumer price index, excluding the volatile food and energy components, rose 0.3 percent last month, the biggest advance since January 2017.
"Markets have underestimated negative NAFTA risks", said Win Thin, the New York-based head of emerging markets at Brown Brothers Harriman & Co. Trucks built there could be subject to a 25 percent tariff if the USA exits NAFTA. A White House official, speaking on background, said there hasn't been any change in the president's position on the NAFTA.
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