Trump plans to replace NAFTA
On August 27, 2018, President Trump announced that he would “terminate the North American Free Trade Agreement” and make a new “free trade agreement with Mexico” during a call with the Mexican President. The deal may potentially leave Canada out.
President Trump arranged a meeting at the Oval Office with Mexican President Enrique Pena Nieto about trade on Monday, August 27, 2018. President Nieto said that he hoped Canada would get involved in the deal; Trump did not respond to this suggestion. According to ABC News, “The president instead had said he’s open to a separate deal with Canada, and said he will terminate the existing NAFTA agreement once there is a deal with both countries.”
Trump stated that he would change the name to “the United States/Mexico Trade Agreement.” He also said that NAFTA “has a bad connotation because the United States was hurt very badly by Nafta for many years.” Trump also claims that NAFTA is a “job-killer” and has a “horrible reputation.”
A spokesman for the Canadian Foreign Minister Adam Austen said that “Canada had been in regular contact with the NAFTA negotiators," and would "only sign a new NAFTA that is good for Canada and the middle class." The spokesman added that "Canada’s signature is required.”
Austen says that in order for the United States/Mexico Agreement to be ratified, Canada needs to be a part of the deal, as well. President Trump says, though, that he will make a separate deal with Canada. According to the Associated Press, “negotiations with Canada have yet to begin.”
Talks about updating NAFTA began in 2017, and several meetings were held between Presidents Trump and Nieto, as well as Prime Minister Trudeau. Lately, the meetings have only been between Nieto and Trump. According to Bloomberg, the “talks between the U.S. and Mexico had focused largely on cars.” Bloomberg also stated that “The countries are said to have agreed that automakers who don’t comply with the new NAFTA rules will pay a 2.5 percent tariff.”