In this file:
· Exclusive: Canada increasingly convinced Trump will pull out of NAFTA
· Canada Goes Toe-to-Toe With U.S. Trade Policy
· Trump could use NAFTA withdrawal letter as negotiating leverage
· Mexico will leave NAFTA talks if Trump triggers process to withdraw
· Nafta Nations Plan More Talks for Mexico in February
· Canada Files WTO Complaint Over U.S. Use of Tariffs
· Business Lobby Risks Clash With Trump on Trade, Immigration
· Trump on NAFTA: Don’t Get Nervous
· Support for NAFTA Well Understood
Exclusive: Canada increasingly convinced Trump will pull out of NAFTA
David Ljunggren, Reuters
January 10, 2018
LONDON, Ontario (Reuters) - Canada is increasingly convinced that President Donald Trump will soon announce the United States intends to pull out of NAFTA, two government sources said on Wednesday, sending the Canadian and Mexican currencies lower and hurting stocks.
The comments cast further doubt on prospects for talks to modernize the trilateral North American Free Trade Agreement (NAFTA), which Trump has repeatedly threatened to abandon unless major changes are made.
Officials are due to hold a sixth and penultimate round of negotiations in Montreal from Jan. 23-28 as time runs out to bridge major differences.
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. Notice of withdrawal could also raise opposition in Congress.
One of the Canadian government sources also said later it was not certain that Trump would move against the treaty and that Ottawa was prepared for many scenarios.
But even the prospect of potential damage to the three nations’ integrated economies sparked market concerns.
Wall Street’s major stock indexes ended lower on Wednesday, partly due to those worries. [.N]
The Canadian dollar weakened to its lowest this year against the greenback on Wednesday as the NAFTA concerns tempered bets that the Bank of Canada will raise interest rates next week.
Mike Archibald, associate portfolio manager at AGF Investments in Toronto, cited “a tremendous amount of uncertainty on the horizon”...
Canada Goes Toe-to-Toe With U.S. Trade Policy
· Canada's case filed in the World Trade Organization against U.S. trade measures is at the forefront of global pushback against Washington's protectionist agenda.
· Canada will use the case to gain leverage in North American Free Trade Agreement (NAFTA) negotiations and in resolving disputes on softwood lumber exports and Bombardier's airplane exports.
· The United States won't accept Canada's pushback lightly and will continue to pressure it in NAFTA negotiations and to stonewall appointments to the WTO tribunal, the body that hears appeals in WTO cases.
Stratfor | Worldview
Jan 10, 2018
Canada has taken a shot at the United States in the World Trade Organization. According to WTO documents circulated Jan. 10, Canada opened a case Dec. 20 against the United States' "systemic trade remedies measures." The United States has launched several trade remedy measures against Canada since U.S. President Donald Trump's administration took office and continues to exert pressure on Canada in negotiations to amend the North American Free Trade Agreement (NAFTA). In Stratfor's 2018 Annual Forecast, we wrote that the United States would continue to push its aggressive trade agenda while trying to increase its centrality in decision making on international trade enforcement. Though this forecast holds, Canada's pushback will make the United States' task more difficult.
Leading the Charge
Canada's case involves the most common focus of U.S. trade enforcement: anti-dumping and countervailing duties (AD/CVD). Canada argues that U.S. trade enforcement measures flout WTO agreements on anti-dumping policies that prohibit companies from exporting products at lower prices than those charged in domestic markets and are also in violation of agreements that impose duties on subsidized imports that are found to hurt domestic producers in a country. Canada also says that the United States is in violation of the WTO's General Agreement on Tariffs and Trade, as well as its Dispute Settlement Understanding. In one of its complaints, Canada accuses the United States of purporting "to implement adverse WTO recommendations and rulings concerning US anti-dumping and countervailing measures, but [doing] so in a manner that is not compliant with its WTO obligations."
The timing of Canada's announcement is conspicuous. The next round of NAFTA talks is scheduled for Jan. 23-28 in Montreal and is expected to be heated. During negotiations, Canada, Mexico and the United States will try to hammer out the finer details of critical issues, including outlining eligibility criteria for automobile exports under the agreement. Canada's actions in the WTO are almost certainly related to the NAFTA negotiations and are a likely bid to increase the country's negotiating power, as it also increases its outreach to pro-NAFTA politicians and groups in the United States. There are also two pending WTO disputes against Canada related to AD/CVD that the government would like to see removed: The tariffs on softwood lumber exports and Bombardier's airplane exports are highly politicized topics in Canada, after all.
Though Canada certainly has plenty of domestic interest in pushing against the trade policies of its southern neighbor, its filing is about more than its own trade disputes. Canada cites 188 examples of U.S. trade remedies in its claims, but only a handful involve U.S. trade action against Canada and another 33 countries are mentioned. Put another way, Canada may be taking on the United States on behalf of the rest of the world, whether by default or construction.
The dispute is sure to become one of the most closely watched WTO cases in recent years. The backbone of U.S. trade enforcement policy has long focused on what the United States perceives as unfair domestic subsidies or dumping by its trading partners. In fact, it's perhaps the most critical reason why the United States opposes China's quest for market economy status in the WTO: Not having the status allows the United States to more easily pursue AD/CVD cases against China. Consequently, Canada's case has become a shot across the United States' bow, especially as the Trump administration continues to take a more protectionist stance on trade and to focus on enforcement of trade policy.
Waking an American Giant? ...
Trump could use NAFTA withdrawal letter as negotiating leverage
David Lawder, Reuters
January 10, 2018
WASHINGTON (Reuters) - A NAFTA termination letter from U.S. President Donald Trump could become the ultimate sleight of hand from Washington as it seeks to gain negotiating leverage over Canada and Mexico in talks to update the 24-year-old trade pact.
While such a letter would start a six-month exit clock ticking, the United States would not be legally bound to quit the North American Free Trade Agreement once it expires.
Unlike the irreversible missile that Britain fired when it triggered a two-year countdown to its exit from the European Union last March, quitting NAFTA would still be optional for Trump. And an exit would almost certainly face court challenges over Trump’s authority to leave without consent from Congress.
Canadian government sources told Reuters on Wednesday that they are increasingly convinced that Trump will soon announce the U.S. intention to pull out of NAFTA. The news sent Canadian and Mexican currencies lower and hurt stocks across the continent.
Sending a termination letter would allow Trump, who has been frustrated with Mexican and Canadian reluctance to meet aggressive U.S. demands on the sourcing of automotive parts and on dispute settlement, to take a key step toward meeting his campaign promise of quitting NAFTA if it cannot be revised to shrink U.S. trade deficits.
“He can gain political mileage out of a big announcement to quit NAFTA without actually doing it,” said Gary Hufbauer, a senior fellow and trade expert at the Peterson Institute for International Economics who has written extensively on NAFTA termination issues.
“He could say that he’ll withdraw from NAFTA sometime after the six-month deadline if we don’t get better results in the negotiations,” Hufbauer said.
Using a withdrawal letter in this manner fits in with a scenario that some industry lobbyists and trade observers say is increasingly likely:
Mexico will leave NAFTA talks if Trump triggers process to withdraw
David Alire Garcia, Adriana Barrera & Anthony Esposito, Reuters
January 10, 2018
MEXICO CITY (Reuters) - Mexico will leave the NAFTA negotiating table if U.S. President Donald Trump decides to trigger a 6-month process to withdraw from the trade pact, three Mexican sources with knowledge of the talks told Reuters on Wednesday.
Reuters reported earlier in the day that Canada was increasingly convinced that Trump would soon announce the United States intends to pull out of the North American Free Trade Agreement (NAFTA), sending the Canadian and Mexican currencies lower and hurting stocks across the continent.
“I think it’s indisputable that if Trump announces a U.S. withdrawal from NAFTA, well at that moment the negotiations stop,” said Raul Urteaga, head of international trade for Mexico’s agriculture ministry.
The two other sources, who are involved in the trade talks and asked not to be named, said that Mexico remains firm on its position to get up and leave from the negotiating table if Trump goes through with the move.
While a NAFTA termination letter would start the six-month exit clock ticking, the United States would not be legally bound to quit NAFTA once it expires. Washington could use the move as the ultimate sleight of hand as it seeks to gain leverage over Canada and Mexico in talks to update the 24-year-old trade pact.
Trump has long called the 1994 treaty a bad deal that hurts American workers. His negotiating team has set proposals that have alarmed their Canadian and Mexican counterparts...
Nafta Nations Plan More Talks for Mexico in February
Seventh round scheduled for Mexico City at end of next month
U.S., Canada, Mexico set to meet first in Montreal this month
By Josh Wingrove and Eric Martin, Bloomberg
January 10, 2018
The U.S., Canada and Mexico plan a seventh round of negotiations for a new Nafta deal for February in Mexico City even as they focus on preparations for talks in Montreal in two weeks, according to two people familiar with the plans.
Negotiations to update the accord have been organized into rounds, or week-long sessions where groups meet to hammer out the details of about 30 chapters under discussion. The talks began in Washington in August and have rotated between the three nations every few weeks since. The Jan. 23-28 round taking place in Quebec will be the first held outside a capital city, and the talks will then return to Mexico the next month, according to the people, who asked not to be named discussing plans that haven’t been announced publicly.
Canadian government officials on Wednesday said there’s an increasing likelihood U.S. President Donald Trump will give six-months’ notice to withdraw from Nafta. The officials, speaking on condition they not be identified, declined to say whether they think the likelihood of Trump following through on repeated threats to quit the pact now exceed 50 percent. The loonie fell along with Mexico’s peso and yields on Canada’s government bonds.
Read more: Kill Nafta? It’s Not as Easy as Trump Might Think: QuickTake Q&A
A White House official, speaking on background, said there hasn’t been any change in the president’s position on the two-decade-old North American Free Trade Agreement.
Mexico’s Economy Ministry declined to comment on Wednesday on speculation that Trump will begin the process to pull out of the deal...
Canada Files WTO Complaint Over U.S. Use of Tariffs
Move comes just weeks before talks on revamping Nafta begin in Montreal
By Paul Vieira, The wall Street Journal
Jan. 10, 2018
OTTAWA—Canada is challenging the Trump administration’s use of tariffs in a complaint filed with the World Trade Organization, just weeks before crucial talks on revamping the North American Free Trade Agreement get under way in Montreal.
Canada says the complaint, made public Wednesday, is part of “broader litigation” to defend the country’s softwood-lumber producers, which were hit last year with U.S. tariffs of 20% or more. The complaint alleges the U.S. application of tariffs, and their calculation, are “inconsistent” with WTO obligations.
Trade-law experts say Canada’s WTO filing is among the broadest challenges to date against the U.S. practice of imposing countervailing and anti-dumping tariffs against imports it deems to be hurting U.S. industries. U.S. Trade Representative Robert Lighthizer criticized Canada’s complaint as “ill-advised” and “unfounded,” adding the move “could only lower U.S. confidence that Canada is committed to mutually beneficial trade.”
While softwood is not a subject being addressed in the Nafta talks, some trade watchers said the complaint nonetheless will add tension around discussions when they resume later this month in Montreal.
“This to me is putting an extra finger in the eye” of the Trump administration, said Mark Warner, a trade lawyer who practices in Toronto and New York. “This is a very aggressive move…and I don’t know whether this is the right time to file this particular case.”
Canada has adopted a more pugnacious approach toward President Donald Trump’s administration on trade as Nafta talks have evolved. Canadian officials have said some of the changes the Trump administration wants in Nafta are “wholly unworkable,” most notably on the auto-production side and how disputes are resolved among the Nafta partners.
At the same time, Canadian officials have worked behind the scenes to press their agenda in meetings with members of Congress, state lawmakers and business groups in hopes that influential allies across the U.S. will support keeping Nafta in place...
Business Lobby Risks Clash With Trump on Trade, Immigration
Chamber’s Donohue warns on Nafta withdrawal, D.C. dysfunction
Group more aligned with White House on infrastructure plan
By Ben Brody and Mark Niquette, Bloomberg
January 10, 2018
Chamber of Commerce President Thomas Donohue called for pro-trade policy and immigration changes and warned against dysfunction in Washington, setting up the largest business lobby for potential conflict with the White House over the best path for growth.
After finding common cause in 2017 with President Donald Trump on tax cuts and regulatory rollbacks, the powerful conservative business group could part ways with the White House on key issues including trade and the midterm elections.
“A major mistake in Washington -- such as withdrawal from Nafta or defaulting on our debt -- would undermine our growth," he said during his annual speech on the state of American business Wednesday. "An upheaval in our government would sap confidence, stoke uncertainty and stymie progress on a pro-growth agenda.”
The chamber is at odds with the Trump administration over threats to withdraw from the North American Free Trade Agreement and actions to do away with protections for undocumented immigrants brought to the U.S. as children.
Donohue also warned against a “backlash against major tech companies” generated by what he called regulatory overreach that he said could stifle innovation.
The group, which is one of Washington’s highest-spending in lobbying and election campaigns, is more in sync with the White House on the need to improve the country’s crumbling highways, bridges and other infrastructure.
"We cannot build a 21st century economy on 20th century infrastructure," Donohue said.
His speech comes as congressional leaders continue to negotiate on a government spending bill before a Jan. 19 deadline. A key issue is the status of approximately 800,000 people brought to the U.S. illegally as children. The chamber is leading a coalition calling for an agreement that would protect the so-called dreamers, who face deportation under Trump’s decision to end an Obama-era program that shielded them.
He acknowledged the chamber still has differences with the White House on the issue, despite a public meeting Trump held with congressional leaders Tuesday.
Immigration Overhaul ...
Nafta Talks ...
Better Deals ...
Upgrade Infrastructure ...
more, including links, video
Trump on NAFTA: Don’t Get Nervous
via KTIC (NE) - January 11, 2018
Following his address to the American Farm Bureau Federation earlier this week, President Donald Trump cautioned farmers and ranchers: “Don’t get nervous” regarding his efforts to renegotiate the North American Free Trade Agreement.
He made the comments during an interview with RFD-TV. In a separate interview with Agri-Pulse, Trump said: “I’m negotiating tough for the farmers.” Trump says he thinks the new NAFTA agreement will “come out very well for the farmer.” However, the President did not promise to not withdraw from the agreement. And, while NAFTA was top of mind for AFBF members, Trump Monday spared but one-line of his speech to the trade agreement, opting to focus on tax reform and regulatory relief. The next round of NAFTA negotiations is set to begin later this month in Canada.
AFBF officials believe...
Support for NAFTA Well Understood
John Ross - Canadian Pork Council
Farmscape for January 11, 2018
The Executive Director of the Canadian Pork Council says support among state agriculture and rural leaders for maintaining the North American Free Trade Agreement remains strong.
This past week State Agriculture and Rural Leaders hosted the 2018 Legislative Agriculture Chairs Summit in Kansas City, Missouri.
John Ross, the Executive Director of the Canadian Pork Council, who was on hand for the summit, says the event provides a tremendous opportunity to visit with elected state officials as well the provincial leaders who attend to discuss issues, primarily trade.
Clip-John Ross-Canadian Pork Council:
Interestingly I thought with the discussion under way about NAFTA that it would be a centre piece in the meetings and, while there was a lot of discussion about NAFTA and its importance, it certainly wasn't the major theme of discussion.
There's really good agreement across the agriculture industry on the importance of trade between Canada and the United States, it wasn't a big issue.
Without question, they're all supportive trade, they saw the value of trade, they look forward to trading with Canada and Mexico in the NAFTA context, strong strong supporters.
I think for a sentiment, it was one of hope, that a deal would get done, and a deal that would benefit all three countries and we could continue to build on the success that we've had to date.
I think for all of us, specifically using the hog industry as an example, trade is fundamental.
We have to move product into markets around the world in order to maximize the value of the animals that we produce and that maximized value comes back to producers.
It's the same story in Canada, it's the same story in the United States and in many cases it's the same story in Mexico as an example of the importance of trade to that market.
We're all in the same boat.
Trade matters a great deal to us.