Canadian Officials See Odds Rising of Trump Leaving Nafta

• January 10 2018
• Josh Wingrove

Canadian government officials say there’s an increasing likelihood U.S. President Donald Trump will give six-months’ notice to withdraw from Nafta.

Canadian government officials say there’s an increasing likelihood U.S. President Donald Trump will give six-months’ notice to withdraw from Nafta.

The officials, speaking Wednesday on condition they not be identified, declined to say whether they now think the likelihood of Trump following through on repeated threats to quit the pact now exceed 50 percent. The loonie fell along with yields on Canada’s government bonds. 

Talks to overhaul the North American Free Trade Agreement between the U.S., Canada and Mexico began in August. They have so far yielded little firm indication of whether a deal can be reached to update the pact, the officials said. 

The Canadian dollar fell 0.8 percent to C$1.2567 against the greenback at 2:24 p.m. in Toronto, erasing this year’s gain. The rate on Canada’s two-year government bonds declined seven basis points to 1.73 percent, dropping from a six-year high reached Tuesday. The yield on 10-year debt was down six basis points to 2.15 percent, with the rate on similar-maturity U.S. Treasuries little changed.

A sixth round of negotiations will begin this month in Montreal. Canada has escalated its trade spat with the U.S. by filing a World Trade Organization complaint over American duties against Canada and other countries. U.S. Trade Representative Robert Lighthizer responded earlier Wednesday, calling that move a “broad and ill-advised attack.”

— With assistance by Maciej Onoszko