Canadian officials are increasingly worried that President Donald Trump will withdraw the U.S. from NAFTA, the decades-old trilateral trade agreement that Trump has repeatedly maligned, according to multiple reports.
“The government is increasingly sure about this ... it is now planning for Trump to announce a withdrawal,” a Canadian government source told Reuters in a report published Wednesday.
Trump also recently said “I want out” as NAFTA (North American Free Trade Agreement) overhaul negotiations continued to sputter, Reuters reported, citing a U.S. source close to the White House.
Canada's NAFTA concerns were publicized the same day as its complaint against the U.S. with the World Trade Organization, alleging that the Trump administration’s tariffs were inconsistently targeting Canadian lumber producers.
The news helped weaken the Canadian dollar, Reuters reported, with financial experts citing heightened uncertainty.
Crucial talks to retool NAFTA are planned for Jan. 23-28 in Montreal, marking the sixth and next-to-last round of negotiations to save the beleaguered agreement between the U.S., Canada, and Mexico.
But Trump administration proposals to amend the agreement have been met with skepticism and alarm by trade groups and Canadian and Mexican officials.
Those proposals include cutting Canadian and Mexican access to the bidding market on U.S. state and federal contracts, as well as a provision that would require a significant uptick in regional automotive content from the U.S.
The White House has also proposed a sunset clause that would automatically end NAFTA after five years if any of the three participants fails to renew it.
The suggestions are “poison pill proposals” that could “doom” the negotiations, the CEO of the U.S. Chamber of Commerce said in October.
The U.S. would be required under NAFTA’s terms to provide six months’ notice before exiting the agreement, but the notice would be nonbinding.
At a campaign-style rally in August, Trump reiterated his disdain for NAFTA, a theme that he emphasized throughout his presidential run.
The U.S. will "end up probably terminating" NAFTA "at some point,” Trump said at the rally, adding that "I don't think we can make a deal because we have been so badly taken advantage of."
The White House said the president’s position on NAFTA has not changed, Reuters reported.
CORRECTION: An earlier version of this story misrepresented information supplied by Reuters. The news agency correctly reported that the Canadian dollar "weakened to its lowest this year against the greenback," referring to a brief Wednesday decline attributed to concerns about whether the U.S. would remain in the North American Free Trade Agreement. The text above now accurately reflects this information.