Trump aims to split up Nafta talks, says adviser

Washington

UNITED States President Donald Trump wants to end the three-party talks to renegotiate the North American Free Trade Agreement (Nafta), aiming instead to deal separately with Canada and Mexico to restructure the trade accord, a senior adviser said on Tuesday.

Mr Trump does not intend to withdraw from Nafta, National Economic Council director Larry Kudlow said on Fox & Friends. But after more than one year of multilateral discussions, he feels the current approach hasn't been fruitful and a new one is needed, Mr Kudlow said.

"His preference now - and he asked me to convey this - is to actually negotiate with Mexico and Canada separately," Mr Kudlow said. "He prefers bilateral negotiations."

It wasn't immediately clear how such an arrangement would work. The US, Mexico, and Canada agreed to Nafta in the 1990s, and all three countries have worked to renegotiate the deal since Mr Trump became president. Changes would have to be agreed to by all sides.

But officials from the three countries have been unable to find consensus on several critical issues, leading to angry finger-pointing between Mr Trump and Canadian Prime Minister Justin Trudeau in recent days. Mr Trump has accused Canada of ripping off the US through unfair trade practices, and Canadian officials have said Mr Trump is using inaccurate information to attack a US ally.

"When you have to compromise with a whole bunch of countries, you get the worst of the deals," Mr Kudlow said. "Why not get the best? ... Canada is a whole lot different from Mexico."

Mr Trump is trying to use the threat of tariffs on steel and aluminium imports, as well as other goods, to force numerous countries to agree to trade concessions.

He's in stand-offs with Mexico, Canada, China, Japan, and members of the European Union (EU), a collection of countries that includes many of the world's largest economies and the largest US trading partners.

The talks all appear to be moving slowly or stalling, leading to angst on Capitol Hill and among business leaders.

Mr Kudlow said he briefed a senior Canadian official on Mr Trump's new idea on Monday and was still waiting for a response.

Mr Trump and Mr Kudlow are travelling to Quebec later this week for a meeting of leaders from seven of the world's leading economies, and several of those officials have expressed frustration at Mr Trump for his protectionist approach to trade.

"Nafta has kind of dragged on," Mr Kudlow said of the negotiations. "The president is not going to leave Nafta. He is not going to withdraw from Nafta. He's just going to try a different approach.

"He believes that bilaterals have always been better. He hates these multilaterals ... he hates large treaties."

Such a move towards separate talks would come at a tense time in US trade relations with the two countries. The Trump administration said on Thursday it was moving ahead with tariffs on aluminium and steel imports from Canada, Mexico and the EU, ending a two-month exemption and setting the stage for a possible trade war.

Mr Trudeau called the tariffs an affront to the longstanding security partnership between Canada and the US, and Canada announced retaliatory steps. WP, REUTERS