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Mexico Economy Minister: NAFTA Must Remain Trilateral Accord

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Reuters

With Trump threatening to tear up the NAFTA agreement and negotiate one-on-one with Mexico and Canada individually, that idea is not going over with either country.

"Now our time is running very short", Mr. Lighthizer said at a joint press conference with his Canadian and Mexican counterparts. He told Mexican broadcaster Televisa that "We would have to target our response at the things they export that are most politically sensitive and hit exactly those goods". After an agreement is concluded, US laws require additional steps before it can even be considered by the current Congress.

Some of MEMA's members would be deeply affected by Trump's tariffs because they rely on specialty steel and aluminum products imported from Europe, Asia and other regions, said Wilson, speaking on the sidelines of the North American Free Trade Agreement talks.

Mexico is boosting its efforts to diversify the destination of its exports to lessen its reliance on the North America Free Trade Agreement (Nafta) amid concerns the USA may pull out of the agreement, officials from the Mexican economy ministry said.

So the steel and aluminum tariffs aren't about national security or protecting steel workers or any of the rhetoric; they're leverage, at least as far as Canada and Mexico are concerned.

"There's not a whole lot to love about the currency right now", said Robert Kavcic, senior economist at BMO Capital Markets, noting that Canada does not appear as though it will be exempt from looming tariffs.

Mr Trump has called the free trade agreement with Canada and Mexico the worst deal the U.S. has ever made.

One of Trump's main campaign pledges was to renegotiate the 1994 trade deal, which he claims unfairly benefits Mexico at the expense of USA industry and jobs, and the talks began in mid-August.

However, CBC is reporting the fall of the loonie is more centered on the ongoing negotiations between Canada, the USA and Mexico to update the 1994 North American Free Trade Agreement (NAFTA), and the more recent threat of exorbitant tariffs the Trump administration wants to impose on steel and aluminum.

"But they try to resolve some of the issues within the sectors to see if they can get some agreement, whereas this nearly gets so, 'Well, if you don't do this, we'll just sacrifice another whole sector, '" he added. The European Commission has said it is drawing up retaliatory measures against leading USA brands such as Levi's jeans and Harley Davidson motorcycles.

Trump has long threatened to pull out of the 24-year-old trade pact if it can't be overhauled and encourage manufacturers to bring factory jobs back the United States.

This is not the first time that Trump has signaled that supply management would become a major NAFTA issue - at least when negotiators finally take it up. But to complete NAFTA 2.0, we will need agreement on roughly 30 chapters. "I have no reason to think he's going to change".

President Trump has been very clear with regards to driving American industry and protecting United States jobs, after all this is the key vote he went after which got him elected.

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