Prepare for a tense moment in Canada-U.S. relations — with hard bargaining on NAFTA on the horizon prompting nervous glances at Donald Trump to see whether he cancels the agreement, now compounded by a bitter, wide-ranging trade dispute.
This story by the Canadian Press appeared in Automotive News Canada.
Canada launched a broad attack against American trade practices in an international complaint about the superpower’s use of punitive duties, eliciting a caustic counter-swipe from the Trump administration when the document was made public Wednesday.
Two weeks from now, the unstated backdrop to the dispute will be squarely in the foreground.
The countries will gather in Montreal for a high-stakes round of NAFTA negotiations, with no additional talks scheduled beyond March. Canadian officials say they know full well that Trump could invoke NAFTA’s withdrawal clause during this January-March period.
What would happen then? For starters, the Canadian dollar and Mexican peso would take a quick plunge, just as they did Wednesday after news reports emerged saying the Canadian government is more convinced than ever that Trump is poised to invoke NAFTA’s withdrawal clause, perhaps around the time of the talks in Montreal from Jan. 23 – 28.
Two Canadian government sources insist that’s not true. Rather, they say there are different points of view within the Canadian government about whether Trump will pull the plug — as he’s repeatedly threatened to do — and, if so, when.
One official said the current uncertainty could last several months, or even longer: even if Trump issues a withdrawal notice, the agreement provides six months before a country can actually leave. Some U.S. observers also predict court fights over whether a president can abandon a trade deal without congressional approval.