11 January 2018•Update: 11 January 2018
By Barry Ellsworth
TRENTON, Canada
Canadian officials expressed concern Wednesday that President Donald Trump will yank the U.S. out of the North American Free Trade Agreement (NAFTA), Canadian media reported.
Two officials, who made the remarks on condition of anonymity, said the government felt that chances of Trump’s pullout were now above 50 percent.
As word of the news spread, the Canadian dollar fell 0.8 percent to CAN$1.2567, its lowest level of the year. The Mexican peso also lost value.
Canada’s two-year government bonds also took a hit, dropping seven basis points to 1.73 percent.
The concern about Trump’s withdrawal from the free trade deal comes as the three signatories – the U.S., Canada and Mexico – are renegotiating the terms of NAFTA, which was signed into law by former U.S. President Bill Clinton in 1993.
But trade disputes have broken out between Canada and the U.S., the most recent involving U.S. imposed duties against Canadian newsprint imports Wednesday.
It was also announced Wednesday that Canada had filed a complaint with the World Trade Organization (WTO), claiming the U.S. had committed nearly 200 violations of global trade rules.
U.S. Trade Representative Robert Lighthizer said the WTO filing “could only lower U.S. confidence that Canada is committed to mutually beneficial trade”.
Any of the three countries can pull out of NAFTA if they give six months’ notice, but the agreement remains in effect.
Any of them can also rescind the withdrawal during that time period.
The sixth round of NAFTA negotiations are slated to begin Jan. 23 in Montreal.
