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Canadian biz group: Canada, Mexico should stick with NAFTA if U.S. leaves

Canadian biz group: Canada, Mexico should stick with NAFTA if U.S. leaves

November 02, 2017

If the U.S. leaves NAFTA, the deal should remain in place for Mexico and Canada – though the two countries should lean on the current negotiations to update it, the Canadian Chamber of Commerce in Mexico said Monday in a letter to Mexican President Enrique Peña Nieto.

“In the face of the real threat of the U.S. government decision to terminate the agreement, CanCham emphatically maintains that NAFTA should not only remain in full force for Mexico and Canada, as foreseen in the agreement, but also take advantage of the current negotiating process,” the Chamber wrote.
The group expressed concern over several U.S. proposals including a sunset clause, “asymmetric rules of origin,” “seasonal administration of certain agricultural exports,” dispute settlement changes and “the incorporation of matters alien to the agreement, such as the trade deficit and the undervaluation of exchange rates.”

“None of these proposals would strengthen the North American region to foster its competitiveness and would be very damaging to the economy of the three countries, especially to crucial value chains constructed over several years,” the letter states.

Faced with the threat of U.S. withdrawal, the Chamber called on the Mexican government to announce that it was “ready to unilaterally and strategically undertake tariff rates reduction consolidated at the WTO” and to “ratify its commitment on the economic stability of the country and to defend the rule of law.”

Analysts have said that a reversion to WTO tariffs would hurt the U.S. more than Mexico because, under WTO rules, Mexico could impose much higher tariffs than the U.S., particularly in sectors such as agricultural products.