Trump is driving a wedge between 2 key US allies – Finance

  • The North American Free Trade Agreement (NAFTA) hangs on balance after violent negotiations, including the leakage of unflattering comments by US President Donald Trump about his Canadian counterparts.
  • "Many Canadians feel that Mexico has turned away from them," said Duncan Wood, director of the Institute of Mexico.
  • This wedge between two key allies could come back to damage the United States.

The Free Trade Agreement between North America (NAFTA) hangs on the balance sheet after violent negotiations.

President Trump seems to be inclined to destroy the trade agreement, despite the efforts of Mexico and Canada to save him. His dismissive comments on his Canadian colleagues were leaked to Toronto-Star, which is even more difficult for Prime Minister Justin Trudeau and his chief negotiator for trade, Foreign Minister Christine Freeland, to find a common language with the United States.

But perhaps one of the worst consequences of Trump's "bull-in-China" approach to trade negotiations is what he managed to do with relations between Mexico and Canada. Trying to negotiate individually, Trump used a divide-and-conquer strategy, which could prove counterproductive, given the level of integration of North American supply chains, in particular, in the production of bulky goods such as cars and airplanes.

"We know that in Canada it turned out badly. Many Canadians feel that Mexico has turned away from them, "said Duncan Wood, director of the Institute of Mexico, at a briefing with reporters.

"Mexico has moved from a bad guy to a friend, and Canada is now" an obvious enemy, "he said.

Jorge Castaneda, the former Minister of Foreign Affairs of Mexico, told Bloomberg that although it is "desirable" for Canada and Mexico to cooperate, they have different issues and industries. "I I'm not sure that this is so simple, because many of the most disturbing issues for one country are not so important for another, "he said.

Automotive sector, with its highly integrated supply chains, is one of the key links connecting all three countries. But there are great differences in the requirements of agriculture, as well as in the specifics of problems related to work and the environment, which are discussed in the agreement.

How could it come back to pursue American enterprises?

There is already evidence that trade uncertainty aggravates plans for investment in US business. The collapse of a long-standing agreement, such as NAFTA, while it can still be prevented, will be enough shock for the economy involved – and financial markets were already rumbling risks from emerging markets,

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