Canada Raises Alarm on Trump Leaving Nafta

THE CANADIAN PRESS

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The loonie fell along with Mexico's peso and yields on Canada's government bonds.

- A quadrupling of US agricultural product exports to Canada and Mexico since 1994.

Trade relations between the two countries have taken a dramatic turn this week, with Canada escalating its trade spat with the U.S.by filing a World Trade Organization complaint over American duties against Canada and other countries.

A White House spokesman said "there has been no change in the president's position on NAFTA".

"The Canadian government is aware of the possibility that President Trump may announce the United States's withdrawal from NAFTA", a senior government official told AFP on condition of anonymity.

The next round of NAFTA talks - the sixth so far - will be held in Montreal from January 23 to 28.

For one thing, Congress would have to approve such a move - and that's unlikely.

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The auto and freight sectors are considered to be the most "at risk" in the NAFTA renegotiation talks as movement of manufacturing facilities and lower trade volume could hurt financial results and decrease productivity. "It's hard to gauge how much credibility Poloz will assign to the types of reports we're seeing today, but it does make it easier for him to maintain a holding pattern".

Mexico's peso reversed slight gains against the dollar after the report, and was trading down more than 0.6 pct at 1925 GMT, while the S&P/BM IPC stock index was down about 1.7 percent.

Canadian officials, speaking to CBC News, said they are prepared for anything but have no reason to believe Trump will announce his intention to withdraw this month.

The source said Canadian ministers felt a withdrawal could be created to show Trump's base that he was keeping his promises and also to put pressure on the negotiators.

Constellation Brands is an worldwide beer, wine and spirits company with operations in U.S., Mexico and Canada.

A withdrawal notice doesn't mean Nafta would be killed - a country can give notice and then not actually leave.

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