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Kill Nafta? It's Not as Easy as Trump Might Think

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Horizon Investments' Valliere Says NAFTA in Real Trouble
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U.S. President Donald Trump repeatedly blasts the North American Free Trade Agreement and threatens to terminate the 1994 accord if talks to rewrite it don’t go his way. After six rounds of negotiations, the U.S., Canada and Mexico have made modest progress but remain deeply divided in five areas, including how to settle disputes and the amount of U.S. content in auto production. The terms of the Nafta treaty offer Trump an exit path, but considering the many complications involved, would he really pull the plug?

He seems to run hot and cold on the pact. Lately, Trump has toned down his anti-Nafta rhetoric. Talks are already being tentatively scheduled beyond March, which had been something of a soft deadline, with some officials and stakeholders saying they could run into 2019. But earlier this year, Canadian government officials thought the odds that Trump would soon give notice of withdrawal had increased. The two countries are locked in a years-long spat over U.S. tariffs on Canadian lumber, prompting Canada to file a sprawling trade challenge against the U.S. at the World Trade Organization, which the U.S. called a “massive attack.” More recently, the U.S. International Trade Commission delivered a victory to Canada when it ruled that its exports of Bombardier Inc. airplanes to the U.S. hadn’t harmed domestic sales of Boeing Co., blocking tariffs of almost 300 percent that the U.S. had imposed on the jets.