Prime Minister Trudeau will meet President Trump and trade-focused US politicians on the North American Free Trade Agreement while hundreds of negotiators, government officials and lobbyists from Canada, Mexico and the United States descend on a hotel in Arlington, Virginia for a fourth round of talks.
The Canadian leader’s visit comes amid increasing acrimony over Nafta renegotiations, with President Trump making fresh threats to terminate the 23-year-old agreement and the US Chamber of Commerce yesterday accusing Trump’s administration of trying to sabotage the talks with “poison pill proposals”.
Mexican Foreign Minister Luis Videgaray warned that an end to Nafta would mark a breaking point in US-Mexican relations and affect bilateral cooperation in non-trade areas.
The Nafta talks are likely to stall in the face of aggressive US demands to sharply increase content requirements for cars and car parts, trade experts say.
The Washington round promises to be difficult, with Mexican sources saying the talks are expected to be extended by two days to October 17.
People briefed on the US proposals said that the North American content threshold for automotive would rise to 85 per cent from the current 62.5 percent, with a 50 per cent US-specific content requirement.
“These will be met with widespread opposition from Canada and Mexico. I think it’s just a bridge too far,” said Wendy Cutler, the Asia Society’s Washington policy director and former chief US negotiator for the Trans-Pacific Partnership trade deal cancelled by President Trump.
Other contentious US proposals opposed by Canada, Mexico and US business interests include a five-year sunset provision, radical changes to Nafta’s dispute arbitration systems, changes to intellectual property provisions and new protections for US seasonal produce growers.
In his meeting with President Trump, Prime Minister Trudeau is expected to remind the president that Canada is the United States’ biggest export customer, with largely balanced two-way goods and services trade, and is not the cause of US manufacturing jobs lost under Nafta, Canadian officials said.
Mexico has that distinction, with far lower wages that have lured US auto plants and other manufacturers across its northern border, resulting in a $64 billion trade surplus with the United States last year that Trump administration officials have vowed to slash.
Prime Minister Trudeau in April urged President Trump not to withdraw from Nafta due to the pain it would cause on both sides of the border.