October 13, 2017 / 1:25 PM / 5 days ago

Mexico says NAFTA would survive with Canada even without U.S

Mexico's Economy Minister Ildefonso Guajardo as he leaves the 9th U.S - Mexico CEO Dialogue in Mexico City, Mexico October 11, 2017. REUTERS/ Carlos Jasso

MEXICO CITY (Reuters) - Mexico would keep trading with Canada under the North American Free Trade Agreement (NAFTA) even if the United States opts to abandon the pact, Mexico’s economy minister said on Friday, as a fourth round of talks proceeded near Washington.

“NAFTA, by itself, will not collapse,” said Ildefonso Guajardo, speaking on a Mexican television panel with Canada’s international trade minister François-Philippe Champagne.

“The possibility is that the United States leaves the treaty, but the treaty itself would keep regulating relations between Canada and Mexico,” Guajardo said.

Tensions between the three trade partners have increased after President Donald Trump said on Wednesday he would be open to bilateral deals with Mexico and Canada, and warned again that he might terminate the pact altogether.

A U.S. proposal to add a so-called “sunset clause” to force negotiations every five years has also triggered unease over NAFTA’s future.

Guajardo and Champagne pushed back against the idea on Friday, saying a sunset clause should not be part of the modernized treaty.

Champagne said a sunset clause would cause uncertainty.

“We don’t need a sunset clause,” he said. “We need to take a long-term view.”

Another point of discord emerged on Friday as U.S. negotiators disclosed proposals to mandate that at least half of the content of autos that benefit from NAFTA must be made in the United States, sources familiar with the talks said.

Canada and Mexico oppose the idea, which is one of the Trump administration’s key demands to modernize the pact.

Reporting by Daina Beth Solomon; Editing by Frank Jack Daniel

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