Canada preparing for possibility Trump will pull out of NAFTA

The potential dismantling of the North American Free Trade Agreement poses the biggest risk to Canada's railways not benefiting this year from healthy economies and higher

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"A US withdrawal from NAFTA would cost the USA pork industry $1.5 billion".

Canadian government officials say there's an increasing likelihood that the US will give six months' notice to withdraw from the North American Free Trade Agreement, according to separate reports from Reuters and Bloomberg.

"Despite the uncertainty surrounding NAFTA and rumors Mexico wouldn't be able to continue exporting to the United States, it's important to note that not only did we hit a record in exports but we also had record export numbers to the United States with almost 10 percent growth", AMIA President Eduardo Solis said.

The loonie fell to trade down 0.8 percent against its USA counterpart.

The sixth round of NAFTA negotiations are slated to begin January 23 in Montreal.

Reuters reported, citing two Canadian government sources, that Canada is increasingly convinced that Trump will pull the US out of the trade agreement.

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With Canada and Mexico objecting to major changes that Washington wants in NAFTA, time is running out to settle differences before the negotiations are scheduled to wrap up at the end of March.

U.S. Trade Representative Robert Lighthizer said the WTO filing "could only lower U.S. confidence that Canada is committed to mutually beneficial trade".

Soon after the story, the Toronto Star reported that while Canada is "actively preparing" for a possible withdrawal, officials aren't "convinced" that Trump will abandon the agreement.

"The Canadian government is aware of the possibility that President Trump may announce the United States' withdrawal from NAFTA", a senior government official said on condition of anonymity. A withdrawal notice doesn't mean Nafta would be killed - a country can give notice and then not actually leave.

"In my opinion, I think at a certain point Donald Trump will launch an intent to withdraw but the difference between the intent to withdraw and fully realizing that objective are very, very different", Dawson said in an interview with CBC's Power and Politics.

"It's under negotiation as we speak", he said.

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