Trump Says Separate Trade Pacts With Canada, Mexico Could Replace Nafta

By William Mauldin Features Dow Jones Newswires

President Donald Trump, speaking alongside Canadian Prime Minister Justin Trudeau, opened the door to separate trade deals with Canada and Mexico top replace the North American Free Trade Agreement and repeated his warnings that the U.S. could withdraw from the pact.

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"I think Justin understands this, if we can't make a deal, it will be terminated and that will be fine," Mr. Trump said Wednesday, underscoring the plan for now is to "renegotiate" the 23-year-old trade pact.

Asked if he would consider separate deals with Canada and Mexico, Mr. Trump said that he would. He added: "It's possible we won't be able to reach a deal with one or the other. But in the meantime, we'll make a deal with one."

When Mr. Trudeau was asked in French by a reporter about separate deals, he replied in French, "We're negotiating at the moment," according to a summary sent around by the White House.

Mexican officials have said they will cease negotiating if Mr. Trump gives formal notice of intent to withdraw from Nafta.

Several miles away in Northern Virginia, officials from Canada, Mexico and the U.S. opened the fourth round of talks on Wednesday. "Thus far, we have made good progress, and I look forward to several days of hard work," U.S. trade representative Robert Lighthizer said in a statement.

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Mr. Trump repeatedly warned about withdrawing from Nafta during the campaign, calling the trade pact a "disaster," but the threats have taken on new urgency now that the U.S. is proposing language to change the agreement in ways that Canada and Mexico say are unacceptable.

American business and farm groups this month are asking their members to let lawmakers and the administration know that they want to keep the deal intact.

"We have to protect our workers and in all fairness the prime minister wants to protect his people also," Mr. Trump told reporters at the White House. "So we'll see what happens with Nafta."

Mr. Trump says Nafta puts American workers in unfair competition with lower-wage Mexican workers, a message that resounded in the industrial Midwest in the 2016 campaign. Negotiators are looking to insert tougher labor and environmental provisions in Nafta and prevent companies from moving production abroad to cut costs.

"It's possible we won't be able to make a deal and it's possible we will, " Mr. Trump said.

Mr. Lighthizer has said the U.S. would aim to preserve Nafta's trilateral structure but that some parts of the deal would be hashed out bilaterally.

Many business groups and some congressional aides are warning Nafta -- and some of the benefits companies have enjoyed in that agreement -- are at risk. Still, some observers of the talks say the Trump administration's aggressive proposals, and its tough rhetoric, are part of its negotiating strategy.

The U.S. and Mexico are seeking to wrap up talks by around the end of the year, before 2018 political seasons.

--Michael C. Bender contributed to this article.

Write to William Mauldin at william.mauldin@wsj.com

(END) Dow Jones Newswires

October 11, 2017 16:51 ET (20:51 GMT)