Canada stresses talks on NAFTA will involve all three members

Reuters News
Posted: Feb 21, 2017 1:22 PM

By David Ljunggren

TORONTO (Reuters) - Any talks to renew the North American Free Trade Agreement would involve all three member nations, a top Canadian official said on Tuesday, dampening speculation the United States might seek to sit down with Canada first and then Mexico.

"We very much recognize that NAFTA is a three-nation agreement and were there to be any negotiations, those would be three-way negotiations," Foreign Minister Chrystia Freeland told a Toronto conference on the future of North America.

U.S. President Donald Trump - who says free trade treaties have cost countless thousands of American jobs - wants NAFTA to be renegotiated with a focus on cutting his country's large trade deficit with Mexico.

Trump says he only wants to tweak trade ties with Canada, prompting a senior Canadian official to suggest to a newspaper that Washington would want to negotiate with Ottawa first.

Mexico opposes the idea, which trade experts say is almost unworkable in any case.

Mexican Economy Minister Guajardo Ildefonso earlier told the conference that the bulk of the NAFTA talks would have to be carried out on a trilateral basis to give investors confidence that the same set of investment rules applied everywhere.

Trump has revealed little about his intentions for NAFTA, which took effect in 1994, except that he wants large changes with Mexico. [nL1N1FY0SP]

The Mexican government expects the talks to start this summer, said Guajardo, who stressed several times how well Canada and Mexico had worked together in the past on trade.

Freeland noted that Trump's choices for commerce secretary and trade representative had yet to be confirmed.

"We all have to collectively be careful not to get ahead of ourselves," she said, stressing the closeness of bilateral ties with Mexico.

One idea floating in Washington is that of a border tariff, which could hit Mexican exports.

"Nothing in the new NAFTA should be a step backward. We will definitely not include any type of trade management measures, like quotas, or open the Pandora's box of tariffs," Guajardo said. "That will be disastrous in any process moving forward."

For the talks to succeed, governments in all three nations would have to prove they had benefited, he added.

"If I don't go back home with a trade agreement that can be clearly understood as a beneficial outcome for Mexico, there is no way the Mexican Senate will approve it," he said.

(Reporting by David Ljunggren; Editing by Dan Grebler)