Trump positions could trigger NAFTA talks breakdown

Significance

Canadian Foreign Affairs Minister Chrystia Freeland presented on August 14 a number of conditions for the talks. The negotiation objectives of President Donald Trump's administration tread onto several red-line issues for the Canadian and Mexican governments, which will seek vigorously to defend their respective national interests in the face of US protectionism. At stake is the integrated North American economy that has existed since 1993, with significant continental economic repercussions to be expected should negotiations go sour.

Impacts

• The US political fixation on trade deficits will lead to economically sub-par NAFTA positions.
• Republican legislators and governors will seek to rein in disruptive positions by the White House ahead of 2018.
• Staffing cuts will diminish US negotiating capacity compared to their Canadian and Mexican counterparts.