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U.S. And Canada Fail To Reach NAFTA Deal, Negotiations To Resume Next Week

The United States and Canada failed to agree on terms of a new North American Free Trade Agreement (NAFTA) this week. The deadline for doing so was Friday, August 31st.

Negotiations will resume on Wednesday, but the fate of the three-nation agreement is becoming less certain. Even so, negotiating officials from both the United States and Canada confirmed that they will continue working toward a trilateral agreement, with good progress being made in overhauling the 24-year-old trade deal.

“We know a win-win-win agreement is within reach and that’s what we’re working towards,” said Canadian Minister of Foreign Affairs Chrystia Freeland during a Friday press conference.

Chevrolet Equinox with dealer storefront

Chevrolet Equinox models at a Chevrolet dealer. GM imports some Equinox models from Mexico.

One of the biggest points of contention are concessions on agriculture, with the U.S. looking for Canada to end its steep tariffs on U.S. dairy products, which President Trump claims hurt U.S. farmers. But Canadian Prime Minister Justin Trudeau has promised to protect the dairy industry of his nation.

“The government of Canada will not sign an agreement unless it’s good for Canada and good for Canadians,” Freeland said Friday.

Another principal issue is auto trade, with Trump having threatened to impose new tariffs on Canadian-made cars coming into the U.S.

“If we don’t make a deal with Canada, that’s just fine. I say, affectionately, we’ll just have to tariff those cars coming in.”

Negotiations will resume next week, but the U.S. has already reached a bilateral deal with Mexico that calls for 75 percent of automotive content (parts) to be made in the NAFTA region, up from the current requirement of 62.5 percent. The requirement is expected to shift production of some automotive parts to Mexico from China.

In addition, the bilateral deal requires 40 to 45 percent of auto content to be made by workers earning at least $16 per hour. The move will likely result in the relocation of some automotive production from Mexico to the United States, but could also result in an increase in Mexican automotive wages.

In addition, the agreement limits exports of Mexico-made vehicles to the United States at 2.4 million vehicles annually, with any volumes above that level being subjected to tariffs.

GM Authority Executive Editor with a passion for business strategy and fast cars.

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Comments

  1. If there is ‘no’ agreement, General Motors should ask the Trump Admin for a 2-year tariff wavier in trade for moving all Canadian vehicle manufacturing work to the United States.

    Reply
    1. Trump = WINNING!

      The Art of the Deal in action…

      President Trump outsmarted Canada and their unpopular Prime Minister badly. Got Mexico to make a deal bilaterally which puts the pressure on Canada which now will not even get a deal close to what they wanted.

      And to think Canada thought their little friend Mexico was going to gang up on Trump in the schoolyard. Lol Little dog Trudeau, all bark no bite…

      Reply
      1. Lol you’re on a different planet bud

        Reply
      2. I’m going to guess that you are American. With the typical American attitude. Our Prime Minister is not – as you suggest – “unpopular” – far from it. Trump, on the other hand, has been bullying just about every nation on earth since he was elected. I can barely think of another major nation that he hasn’t badmouthed and that list would include Canada, Mexico, China, Russia, Germany, the U.K., Turkey, Iran etc. etc.

        Reply
    2. It would most likely go to China. Since 2016, foreign investment in the US has dropped to near ZERO.

      The 2 largest vehicle exporters in the US, BMW and Merc. Benz. are making plans to move a significant part of their production outside the US. Political and financial risk is too high.

      Reply
  2. What better way to get back at Canadians, should no agreement be reached, than be slapping a tariff on imported Canadian cars. Especially considering more than 60% of all parts that go into building “Canadian” cars come from the US today.

    In other words, this is another dingbat move and threat that amounts to a lose-lose for American workers and consumers. I’m sure Trump’s base will celebrate it, however, if they haven’t already beat me to it.

    BTW, that tariff should Mexican built cars not meet the new threshold: 2.5 percent. You can bet VW, GM, etc. are running the numbers–if they haven’t already–and will do what’s in their best interest, whether that’s to use more North American content, or simply pass the 2.5 percent tariff on to consumers. Whatever happens, it’s safe to assume all cars and trucks, regardless of where they’re manufactured, will see their prices increase. The manufacturers that benefit will be the ones that already meet the threshold, but with other countries likely to reciprocate, they’ll feel the pain one way or another.

    In the meantime, some of us can act like we’re doing what’s best for Americans, even if that means sticking it to Americans, and our ally and important trading partner to the north, which we had a 12 billion dollar trade SURPLUS with in 2016, no thanks to the numbskull in office today.

    Reply
    1. Reggie, “Sean”, the sore loser still cant get over his Trump Derangement Syndrome.

      President Trump keeps on winning…Got Mexico to make a bilateral deal shutting Canada out like the amateur negotiators they are. Poor Trudeau and Canada thought Mexico was on their side until the Mexicans made a deal without them. Lol Now Canada is rushing

      Under President Trump:

      – U.S. economy best in more than 50 years
      – Black unemployment lowest in history
      – Hispanic unemployment lowest in history
      – Asian-American unemployment now lowest in history
      – Consumer confidence best in 20 years
      – Longest bull run of the stock market ever
      – Tax cuts largest ever
      – and on and on…

      Facts dont lie like “Reggie”…

      Reply
      1. Let’s check the list with Wow-effect:
        Under President Trump:
        … who just inherited what happend earlier

        – U.S. economy best in more than 50 years
        … but wages are as low as 40 years ago

        – Black unemployment lowest in history
        – Hispanic unemployment lowest in history
        – Asian-American unemployment now lowest in history
        … at lowest wages

        – Consumer confidence best in 20 years
        … I just hope that us people to not bet on the glitzery show and get again in deep debt, resulting as 10 years ago in foreclosures and endless misery

        – Longest bull run of the stock market ever
        … the bubble is being blown up more and more, until it bursts
        … Trump took office 18 months ago — this is not the “longest bull run” of Wall Street, and if you count the full lenght of the current rise in stock prices, then this cannot be attributed to Trump.

        – Tax cuts largest ever
        … for the rich and super rich, only temporary for lower income classes.
        … i.e. the income side in the national budget has a gaping hole, but on the expense side huge expenditures for wars and war preparations widen the gap between income and expenses in the national budged more than ever. Result: the USA, the most endebted country of this planet will get indebted more and more, until it bursts… China is the largest creditor of the US — imagine when China finally wants to get paid in real values instead of just debt certificates.

        – and on and on…
        …. forward to ever bigger economic crises and crashes

        But nothing to see of the most necessary: to unionize the South!

        Reply
        1. Not bad.

          Reply
      2. The truth is not the truth haven`t you heard……………

        Reply
      3. You’re an idiot. Never, should you ever attack a writer for a blog you enjoy reading and commenting on, ever. Go back to living under a rock. Keep your deluded opinions to yourself.

        Reply
        1. BTW, the article above was not even written by Sean Szymkowski, but by Alex Luft.

          Reply
      4. You are right about the one part…. Trump Deranged Syndrome… he has that……

        Reply
      5. Wow is mislead

        “Best economy in 50 years…” ROFLMAO

        I was in a financial presentation last month where the presenter described the US economy as a mere shadow of what it used to be. Growth at the expense of TRILLION $ annual deficits isn’t growth. It’s purely artificial. And it will undoubtedly lead to a loss of confidence in the currency due to sky high 22 trillion deficits and counting.

        If you like fairy tales, stick to church on Sunday. Lol
        http://www.usdebtclock.org/

        Reply
    2. Is that so in the preliminary US diktat to outgoing MX president Peña Neto? The penalty being only 2.5%?

      That’s ridiculous. All US, European — and when present in Mexico — Japanese companies will go on as before, and just raise the prices of their cars by 2.5%.

      Reply
  3. Good for Mexico. Now this smart-alec Peña Neto is out of the picture and the president elect Lopez Obrador will have to take a decision — or not.

    Reply
  4. BTW, is there any automobile factory in Canada, which does not belong to one of Detroit’s “big three”?

    So it is only US corporations which Trump is trying to hit.

    Reply
    1. Reply
      1. Thanks!

        Reply
        1. You are welcome.

          Reply
  5. Canada blew it at first when insisting that gender, natives, and the environment be included in trade talks. When rebuffed, Canada got left behind by not getting on with trade talks.

    Reply
  6. Canada has not got a chance to make a deal when they have to try to deal with Presidents that was elected by the Russians … Impossible..

    Reply
    1. From what I see, people from all nations can vote in American elections, citizenship is not required.

      Reply
      1. This is not correct. See https://www.usa.gov/register-to-vote where the requirements are spelled out as

        »
        You can vote in U.S. elections if you:

        • Are a U.S. citizen
        • Meet your state’s residency requirements
        You can be homeless and still meet these requirements.
        • Are 18 years old on or before Election Day
        In some states, you can register to vote before you turn 18 if you will be 18 by Election Day.
        • Are registered to vote by your state’s voter registration deadline. North Dakota does not require voter registration.
        «

        OTOH, seeing that the POTUS pretends to rule the whole world and to have the right to dicate any other country or individuals what they have to do or what they may not do, all human beings of voting age should elect the POTUS, in world wide elections.

        The citizens of the USA then may elect a president on their own for only local matters concerning the people living in the country USA.

        Reply
      2. Surely tongue in cheek for those that get the underlying meaning. Nice!

        Reply
  7. We should see a deal soon and this story will be forgotten.

    Reply
  8. YOU ARE RIGHT SCOTT3.

    Reply
  9. Trump really cant do anything unless all 3 countries agree.
    1 its a treaty ratified by two thirds of Congress. Congress is the only one that can vote to change the agreement.

    Reply
  10. Wow! This has been quite the thread. Yes, it is true that if China called the debt that the U.S, owes them, they could bankrupt the U.S. If President Trump is so great, why is it that the U.S. national debt has increased? He has been printing worthless money since he was elected. However, this is nothing new, as previous presidents also did exactly the same thing. And that is why the U.S. the is so many trillions in debt. Please don’t get me wrong…Trump is one helluva businessman. But his international manners are absolutely atrocious. Insulting foreign leaders should not be acceptable in any way in this day and age.

    Reply
    1. K. Elliott
      “Trump is one helluva businessman”

      Then why did he go bankrupt 6 times after inheriting a fortune?

      A tax cut for the super rich and mega corporations, does nothing but sink main street further down the hole. The super rich can always re-locate their money at a click of a mouse if things go South. Not the average Joe.

      Reply
      1. As far as I know, he did not go bankrupt as a person, but six of his business ventures did. Most spectacular (in my view) his gambling casino in Atlantic City, New Jersey.

        “Most of his success stories ended with chapter eleven” — Hillary Clinton’s only good argument during her election campaign, but used only one single time. (I quoted from memory, so her wording might have been different)

        Reply
  11. Hope they tell Trump to stick his dead line right where the sun don’t shine again just like they did last week………..

    Reply
  12. I’m aware of some of his past financial troubles, but I must admit I didn’t know he had been bankrupt 6 times. If that is the case, then he shouldn’t have been allowed to even run for the Presidency. In the mean time, however, he has managed to parlay whatever he had left into a large fortune. I am also aware that other billionaires disagree with the amount he claims to be worth (10 billion last time I heard). One billionaire suggested that Trump was worth much closer to 4 billion. No matter how you slice it, that’s a pretty hefty pile of change.

    Reply
  13. Going bankrupt = you don’t have to pay the people you owe money to.

    Reply
    1. Yes he’s famous for screwing people, especially contractors.

      A guy who has been following him for years says he’s worth less than a Billion. He’s the only president who’s cashing in significantly while in office by promoting his business. And security is charged to the max at Trump Tower and his golf club in Florida.

      Reply

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