The flags of Canada, Mexico and the US on a lectern in Mexico City, Mexico. Picture: REUTERS
The flags of Canada, Mexico and the US on a lectern in Mexico City, Mexico. Picture: REUTERS

New York — US President Donald Trump slammed what he termed "decades of abuse" by Canada with a new threat to terminate the North American Free Trade Agreement (Nafta), after talks with the US’s northern neighbour stalled on Friday — hours before a deadline.

"There is no political necessity to keep Canada in the new Nafta deal. If we don’t make a fair deal for the US after decades of abuse, Canada will be out," Trump said on Twitter on Saturday. "Congress should not interfere w/these negotiations or I will simply terminate Nafta entirely & we will be far better off."

The president’s tweet was sent shortly after he left the White House in a motorcade bound for his golf course in Virginia.

Trump’s move on Friday to notify Congress that he planned to sign a deal with Mexico in 90 days and would include Canada "if it is willing" appeared to avoided what many in the US business community and Congress had seen as a worst-case scenario. But Saturday’s tweets opened the door again to that outcome.

"We were far better off before Nafta — should never have been signed. Even the Vat Tax was not accounted for. We make new deal or go back to pre-Nafta!" Trump said.

‘Ripping us off’

That comment repeated a threat from the president earlier in the week to forge ahead with a bilateral trade agreement with Mexico that would leave out Canada, which he on Friday again accused of "ripping us off".

"We can’t have these countries taking advantage of the US," he told supporters in North Carolina.

While the two sides failed to meet a deadline set by the White House, both US and Canadian negotiators insisted that they were making progress. They also announced that they would resume talks on Wednesday after four days of intense negotiations in Washington ended without a final agreement.

Sending the notification to Congress effectively sets a new clock for the Nafta negotiations. Under rules set by Congress, the administration is now facing a 30-day deadline to provide a full text of the agreement.

Building pressure

Because of that, negotiations could still drag on for weeks. But both the US and Canada are facing their own pressures.

US business groups welcomed the signs of progress but made clear that they would oppose any deal that did not include Canada.

"Anything other than a trilateral agreement won’t win congressional approval and would lose business support," the US Chamber of Commerce said in a statement.

Trump’s vitriol towards Canada has complicated the politics for Canadian Prime Minister Justin Trudeau, who on Friday said he would sign only an agreement that was right for his country.

Trudeau reiterated his government would not concede to US demands to dismantle its dairy system, known as supply management. Talks were also hung up on US insistence to eliminate dispute-resolution panels that Ottawa considers essential, two Canadian officials said Friday.

‘Win-win-win’

Laura Macdonald, a political science professor at Carleton University in Ottawa, said that despite the rhetorical pressure from Trump, the negotiations still appeared to be proceeding remarkably normally. But the limits of Trump’s leverage were also becoming clear with the president still needing to get any agreement through a Congress that has concerns about any pact that does not include Canada.

"Trump is making it blatantly obvious who has the most power in this situation, but he doesn’t have complete power: Congress has a role to play," Macdonald said.

Fast-track

Trump has been pushing to get a new Nafta approved under a process known as fast-track authority that allows him to seek a simple yes-or-no vote in Congress on trade deals, as long as his administration clears certain procedural hurdles.

Under fast-track rules, Trump must notify Congress 90 days before signing the deal. The White House set a deadline for Friday because it wanted to notify Congress in time for Mexican President Enrique Pena Nieto to sign the accord before his successor, Andres Manuel Lopez Obrador, takes office on December 1. Any vote in US Congress is unlikely to take place before 2019.

By then, the Democrats may control at least one chamber of Congress, and Nancy Pelosi, the minority leader in the House of Representatives, made clear on Friday that any deal must include Canada.

Bloomberg

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