If you have been following the rounds of negotiations of the North American Free Trade Agreement (NAFTA), you may be surprised by the latest development. Last week, Prime Minister Trudeau was declaring that the three nations were close to reaching an agreement and this week the negotiations have come to a halt because of the United States.
US President Trump has decided to play a card that nobody expected: launch a probe on car imports to see if it generates a national security threat. Canada is directly targeted as it imports a lot of cars and auto parts into the US. If the United States decides that it is the case, President Trump could implement an extra duty of 25% on each import, jeopardizing that sector, both in Canada and in the US.
President Trump thinks that Canada and Mexico have been “spoiled” and “difficult”. Our Minister of foreign affairs Chrystia Freeland opposes that latest negotiating leverage and thinks that it is simply “absurd”.
Despite all of this, some at the south of the border are more optimistic than others, saying that deadlines tend to accelerate the negotiation process. We shall see.