President Donald Trump has said that he intends to end the North American Free Trade Agreement in six months, potentially forcing Congress to pass his new trade deal or risk having no trade deal in place.
"I will be formally terminating NAFTA shortly", Trump told reporters aboard Air Force One on his way home from a G20 summit in Argentina.
Canada's pressure to include "soft things" like labour standards in the new North American free-trade treaty will help secure critical support for the deal from Democrats in the United States Congress, the Canadian ambassador to the US says. Kester says the agreement brings the trading relationship with USA neighbors into the 21st-century.
At the same time, Trump's updated North America trade proposal was encountering a rough reception on Capitol Hill, where both parties have deep divisions over trade that will be on full display as a newly Democrat-controlled House takes up the pact along with the Republican-led Senate. Such a scenario "works very well" for the United States, he said.
The U.S. national day of mourning for President George H.W. Bush on Wednesday has delayed the release of public and private economic data as well as widely anticipated testimony to lawmakers by Federal Reserve Chairman Jerome Powell, Bloomberg News reports.
If Congress doesn't approve the replacement agreement and Trump follows through on his new threat to scrap NAFTA, it could leave Mexican- and Canadian-made vehicles facing additional tariffs and regulations of various kinds.
Meanwhile, a number of lawmakers and business groups are trying to push for the removal of USA tariffs on steel and aluminum imports from Canada and Mexico, which have inflicted harm upon American manufacturers and consumers, raising costs for a wide array of industries.
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Some Republicans say they, too, are disinclined to support the agreement in its current form.
"If they come - which they have - to talk about an extension because of President Bush's passing, I would absolutely consider it and probably give it", he said. "NFU urges Congress to ensure the administration negotiates improvements to USMCA to create a fair trade framework that benefits family farmers, ranchers and rural communities". All trade deals need to be approved by Congress before they can take effect.
"As a result, I owe it to New Mexicans to apply the highest level of scrutiny to this agreement to make sure that our border communities won't suffer the consequences of the administration's flawed negotiations".
According to the American Farm Bureau Federation, agricultural exports to Canada and Mexico increased from $8.9 billion to $39 billion under NAFTA.
Presumptive incoming Speaker of the House Nancy Pelosi described the deal as a "work in progress" that lacks worker and environment protections.
"The United States, Mexico and Canada worked so well together in crafting this great document".