President Trump's top economic adviser said Tuesday that Canada can still get a good trade deal with the USA if it is willing to compromise. John Barrasso (R-WY), a member of the committee on Energy and Natural Resources, told CNBC that he would "rather not" see a revised NAFTA come to Congress for its approval.
The dollar had also been stung by comments from Federal Reserve Chairman Jerome Powell at the Jackson Hole, Wyoming conference this past week that seemed to suggest a slower pace of USA interest rate increases.
Sorry, but shouldn't all of North America be involved with this, not just two out of three countries? But administration officials said Monday there's no reason Congress couldn't approve a two-way deal with Mexico, if necessary. It also opens the door for Canada to get back to the table. And he joins us from Ottawa this morning. For Trump and other critics of NAFTA, the 1994 landmark deal might have helped companies trade more freely across national borders, but it also caused the gutting of the industrial Midwest.
"We believe this is a positive development for Canadian auto parts suppliers since the North American automotive industry will stay intact, and Mexican assembly plants will need to source parts from high-wage jurisdictions such as the USA and Canada", BMO Capital Markets analyst Peter Sklar wrote in a note to clients.
GREENE: OK. So now the three-way conversation has begun.
MANLEY: Well, I think, from the Canadian point of view, there have been a number of things from the outset.
One of the key issues involves the dairy industry.
"There is room to negotiate some kind of concession", she said, but added: "There are cumulative effects of each bit of access that is granted through various trade agreements". For Canadian interests, that's an essential.
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The U.S. and Mexico agreed workers earning at least $16 an hour should make 40 per cent to 45 per cent of autos.
"They (Canada) want to be part of the deal, and we gave until Friday and I think we're probably on track. We're going to get rid of NAFTA because it has a bad connotation". Possibly. But of the roughly 30 chapters in NAFTA, about 10 remain completely outstanding.
On agriculture, "The U.S. and Mexico have agreed to provisions to enhance information exchange and cooperation on agricultural biotechnology trade-related matters", the statement said. That seems like a big task to achieve by Friday. Canada can sign on up until that ratification, which could be at the end of November. Using hockey terms, the Trump administration "wants to pull the refs off the ice" in terms of dispute resolution, Greenwood said. President Trump has called Prime Minister Trudeau weak and dishonest.
While critics said Canada had been frozen out, Freeland has repeatedly stressed to reporters that she remained in close touch with her U.S. and Mexican counterparts throughout the summer and had already achieved "a high-level agreement with the US" on some the pending issues on autos and labor rights. Is this an opportunity to settle some of that down a bit? You know, quite frankly, I've been around this beat for a long time.
President Trump has set a different tone.
The new deal will keep tariffs on agricultural products traded between the United States and Mexico at zero and seeks to support biotech and other innovations in agriculture.
He said he has "bluntly conveyed" for many months concerns over Canada's handling of the trade file, but also saying, "We have been working with the federal government and attempting to be fully supportive".