How the US can get Canada to agree to a new NAFTA deal

Although the Trump administration is inching closer toward striking a deal with Mexico on the North American Free Trade Agreement, the two countries have yet to bring in Canada, the third member state of the decades-old trilateral agreement.

Despite that, the former U.S. ambassador to Canada wasn’t concerned about Mexico and the U.S. leaving their northern neighbor out of the latest round of discussions.

“Canada will be at the table, there’s no doubt about it,” Bruce Heyman said during an interview with FOX Business’ Ashley Webster on Thursday. “The fact of the matter is that Canada is our best trading partner in the world.”

Canadian Prime Minister Justin Trudeau previously has said one of the sticking points is the inclusion of a five-year sunset clause, which would limit the lifespan of the agreement. Trump’s insistence of including that in the trade pact drew swift rebuke from Canada and Mexico.

But if the U.S. backed away from that provision -- or were open to modifications, like modernizing the deal every five years -- Heyman said the three countries could likely settle on an agreement.  “If they stick to that, these are no-go zones for the business community as well as our business partners, so the deal will not happen if they stick to that,” he said.

Canada is, in fact, the second-largest trading partner of the U.S., with exports to Canada totaling more than $341 billion in 2017. And unlike other U.S. trading partners, Washington has a trade surplus with Canada.Talks on how to revamp the 1994 treaty began almost immediately after Trump took office more than a year ago. He warned that if it could not be overhauled to better protect U.S. interests, Washington would pull out of the pact. Both Trudeau and Mexican President Enrique Peña Nieto have argued against scrapping the $1.2 trillion deal. The president’s decision comes in the midst of escalating trade tensions with Canada and Mexico. In response to a U.S. tariff of 10% on aluminum and 25% on steel, both Canada and Mexico slapped tariffs worth billions of dollars on American goods.