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Unhappy Canada Says U.S. Aims To Weaken Other NAFTA Members

Kitco News

David Ljunggren

OTTAWA (Reuters) - Canada’s chief negotiator at talks to modernize NAFTA on Tuesday said the United States aimed to weaken Canada and Mexico rather than ensure all three members of the trilateral trade pact benefited.

Steve Verheul said the talks had achieved little progress on major issues so far and complained about the inflexibility of U.S. negotiators.

His comments were easily the gloomiest public remarks yet by a Canadian involved in the talks and reflected the enormous challenge facing officials trying to wrap up work on revamping the $1.2 trillion pact by early April.

“The U.S. approach is to focus on the U.S. perspective only, rather than a North American perspective. So they are looking to strengthen the U.S. and by doing that weaken Canada and Mexico within the North American economy,” Verheul told an Ottawa conference organized by the Canadian Global Affairs Institute.

U.S. President Donald Trump has frequently threatened to walk away from the North American Free Trade Agreement unless there were major changes.

The talks have made little progress as Canada and Mexico seek to address U.S. demands for reform. The negotiations were supposed to wrap up by the end of March - a deadline officials say has been extended to at least early April - but look set to overrun by months.

Canada has made a number of what it calls creative proposals to address the U.S. insistence that the North American content of autos be raised. Washington also wants a clause that would allow any member to pull out after five years.

“We’ve made what I would characterize as fairly limited progress overall ... the main issue is that we have seen limited U.S. flexibility, even on fairly easy issues,” said Verheul.

“This is being driven to a large extent from the top, from the administration.”

U.S. Trade Representative Robert Lighthizer on Monday pointedly said the United States’ talks with Mexico over NAFTA were going well. Mexico said on Feb. 9 that the autos rule of origin would have to be toughened, but gave no details.

Negotiators have held six rounds since last August and Verheul said the pace had been too fast to allow for consultations between rounds.

Earlier in the day, a senior Canadian government official said trade challenges from U.S. firms would continue to cause turbulence for Canada even if the NAFTA talks succeeded.

Reporting by David Ljunggren; Editing by Bill Trott and Andrew Hay

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