President Trump threatened to withdraw the United States from the North American Free Trade Agreement on Saturday, claiming his right to negotiate a new trade pact that does not include Canada despite opposition from lawmakers and issues
Trump officially briefed Congress on Friday on his intention to enter into a trade agreement with Mexico, adding that the government hopes that Canada will be included in the new pact later. US and Canadian negotiators worked to add Canada on Friday during the week, but negotiations failed to reach an agreement before Trump's Friday deadline.
Negotiations with Canada will continue on Wednesday in hopes of adding Canada to the deal, and lawmakers have told Trump to sign only on a new NAFTA treaty that includes all three North American nations.
But Trump issued a warning to both Canadian Prime Minister Justin Trudeau and Congress Saturday in a post on Twitter and wrote he would go ahead without Canada and loosen the North American free trade if lawmakers did not support his approach.
"There is no political need to keep Canada in the new NAFTA agreement If we do not make a fair deal to the US After decades of abuse, Canada will no longer be there, Congress should not interfere in these negotiations or I will Just quit NAFTA and we'll be much better off … "Trump wrote.
"We are making new Dea l or going back to the time before NAFTA!" Trump wrote as part of a later post.
It is unclear whether Trump could leave NAFTA without Congressional support, though he has repeatedly threatened to do so. Many legislators have said that if Trump attempts to withdraw from the deal, they would move and the move would likely face legislative and legal challenges.
The withdrawal process would require Trump to inform Mexico and Canada 6 months in advance of the intention to leave the pact.
The end of NAFTA without replacement would cause major economic disruption in North America and beyond. Companies that are accustomed to cross-border moving products with little or no taxes would dramatically increase costs – price increases would be passed on to consumers – and domestic producers would lose their access to overseas markets.
Canada is the No. American products are shipped overseas, and more than 8 million US jobs are supported by trade with Canada, according to the US Chamber of Commerce.
The move would protect some domestic industries from foreign competition, part of Trump's goal of reviving some indigenous industries that have opted to relocate production overseas.
US Legislators have generally supported NAFTA by saying that the overall economic benefits of cheaper products and greater efficiency outweigh the negative consequences of job losses. But Trump has focused on areas where industrial decline has led to serious economic difficulties.
Trump's renewed threat to withdraw from NAFTA comes about as US Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland resume negotiations on Wednesday.
Both pages are structured in terms of content, such as regulations for trade in dairy products, patent protection for pharmaceuticals and disagreements over the procedure for settling commercial disputes.
Canadian officials accused the US side of denying concessions. This sentiment seemed to be confirmed on Friday morning when the Toronto Star published comments in which he told Bloomberg journalists that negotiations to revise NAFTA would only take place on his terms.
Trump tries to sign a new NAFTA treaty before the current president Enrique Peña Nieto leaves office on 1 December. Nieto's successor, Andrés Manuel López Obrador, had representatives at talks between the US and Mexico, but if the contract is not signed, he could make new demands and complicate the deal.
This timeline prompted Trump's Friday letter to Congress informing them about the preliminary agreement with Mexico. This letter began a 90-day mandatory notice period for the Congress before the President can legally sign a new contract.
Now, according to US Commerce Law, Trump has 30 days from Friday to receive the final text to Congress Canada is not included in this final text; it would be legally very difficult, if not impossible, to involve the country later.
For Canada, losing access to the US market would be a severe economic blow. And Trump continued to threaten to send 25 percent of the cars and car parts tariffs from Canada to the United States – a move he could take without the approval of the congress.
Foreign leaders "underestimated Trump again and again," said Dan DiMicco, a former Trump senior steel and trade advisor who met with the President in Charlotte on Friday. "If he is not tough on anyone, why will China then believe that he will be tough on them?"
But for Trump, there would be no showdown with Congress, in which all parties would take part in grim jurisdiction. It is unclear whether the authority Trump needs to renegotiate is limited to an agreement with Mexico, and legislators – as well as Mexican officials – continue to stress the need to accept Canada.
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