Trump prefers separate NAFTA negotiations with Canada and Mexico: Kudlow

Trudeau and US President Donald Trump.   Jonathan Ernst  Reuters

Trudeau and US President Donald Trump. Jonathan Ernst Reuters

President Donald Trump's top economic adviser says the president now prefers to negotiate separately with Canada and Mexico over their three-country trade deal.

"Canada has maintained right from the beginning we believe in a trilateral NAFTA".

Trump, who has long said two-country trade deals are better than multi-country trade deals, has repeatedly floated the idea of signing separate deals with Canada and Mexico rather than remaining in the current three-country North American pact.

But the U.S.is getting more serious about the possibility.

Foreign Affairs Minister Chrystia Freeland discussed trade and tariffs with key Republicans while she was in Washington for the general assembly of the Organization of American States, a Canadian government official said. On Tuesday, Kudlow doubled down.

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"He's not going to withdraw from NAFTA, he's just going to try a different approach", Kudlow said on Trump's favourite morning show, Fox News's Fox and Friends.

"I think the important thought here is he may be moving quickly towards these bilateral discussions instead of as a whole", Kudlow said. What's more, they can be narrowly tailored to fit the different economies of the two countries.

The remarks are likely to create more economic uncertainty between Canada and the USA following Trump's imposition of steel and aluminum tariffs that now affect imports from this country, Mexico and Europe. It will impose a 20% tariff on USA pork, apple and potato imports and 20% to 25% levies on cheeses and bourbon.

"Yesterday we met with the president a couple times, and he is very seriously contemplating kind of a shift in the NAFTA negotiations".

An anonymous senior Canadian official told AFP that Canada was not taking such an option off the table, but would prefer to keep the NAFTA agreement alive. The two leaders "agreed to continue working toward a mutually beneficial outcome" on NAFTA, Trudeau's office said.

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