Mexico readies for worst as 4th round of NAFTA talks open

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Asked during his appearance with Trudeau whether NAFTA was dead, Trump said, "We'll see what happens".

Ending NAFTA, however, would result in a full reversion to tariffs under World Trade Organization rules, according to the Boston Consulting Group study sponsored by the Motor Equipment Manufacturers Association.

U.S. proposals include limiting the number of federal government contracts that Mexican and Canadian companies can win, a provision that would cause the deal to automatically expire in five years unless all three countries vote to renew, and changes in how much of a product needs to be made in North America to come under Nafta protections.

Making a revised NAFTA deal will require flexibility from all those involved in the deal, Meyer says.

Freeland describes the US administration as the most protectionist since the 1930s while noting the United States runs a surplus in the trade of goods and services with Canada.

Mexico's ambassador in Washington Geronimo Gutierrez has said a termination clause would erode business confidence in the region, while his Canadian counterpart has said the Trump administration probably wouldn't find much domestic support for the proposal.

"Let me be forceful and direct", Tom Donohue, president of the US Chamber of Commerce, said earlier this week.

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The U.S. Chamber of Commerce on Tuesday accused Trump's administration of trying to sabotage the talks with "poison pill proposals", including demands for more favorable treatment for the U.S. side on vehicle production, and a "sunset clause" to force regular negotiations.

The U.S. side sees strengthening the rules of origin for the auto industry as a way to bring back automotive production and jobs from Asia.

If the North American Free Trade Agreement survives the renegotiation effort, The United Kingdom may be interested in joining the pact. Mexico could leave NAFTA and have the strength to move on without any serious long-term structural damage to the economy, he said.

The Chamber and the trade group for Mexico's auto industry already have come out against an anticipated proposal to raise USA -specific content. Scheduled talks in this session have been extended by two days to Tuesday. Levy said. "Or are they going to take this as a pretext and say: 'We tried negotiations; they failed".

"The comedy show is unfolding in Washington, there's no question about it", he said.

Trudeau later said he was optimistic that an agreement would be reached.

Despite their common ground, however, Canada and Mexico are also at odds on some key issues. "Among conditions demanded by the US are a significant increase in regional content - particularly USA content - in the region's exports, a uniform upper limit for government purchases, some restrictions to agriculture products coming to the US from Mexico and Canada, and the elimination of the chapter on resolution of controversies".

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