Trump says could envision trade deal with Canada without Mexico

Our most-read: One subject -- the NAFTA redo – dominates the list

Defiant Trump could derail free trade agreement talks

While Trump has regularly targeted the US trade deficit with Mexico in renegotiating the deal, tensions are rising with Canada, the top buyer of USA exports.

Trudeau is scheduled to visit Mexico City on October 12 and 13 after his two-day Washington's his first official visit to Mexico, with Trudeau's office saying he and President Enrique Pena Nieto will discuss trade issues.

"I continue to believe in saying, we are ready for anything, and we will continue to work diligently to protect Canadian interests", Trudeau said.

In his meeting with Trump, Trudeau was expected to remind the president that Canada is the United States' biggest export customer, with largely balanced two-way goods and services trade, and is not the cause of USA manufacturing jobs lost under NAFTA, Canadian officials said.

Asked during his appearance with Trudeau whether NAFTA was dead, Trump said, "We'll see what happens".

U.S. Agriculture Secretary Sonny Perdue said Tuesday he took Trump's comments to mean the president wants a trade deal with better terms.

Terminating the deal is one option he alluded to, and in the past Trump's said doing so would allow something completely new to be written. "We have to protect our workers, and in all fairness, the prime minister wants to protect Canada and his people also". U.S. Trade Representative Robert Lighthizer, Freeland and Mexican Economy Minister Ildefonso Guajardo are now expected to meet on October 17 to wrap up the latest round, according to officials familiar with plans who spoke on condition of anonymity. USTR readies 50% auto-content proposal as NAFTA talks resume. The US is expected to propose substantially raising the regional requirement, from 62.5% now, and potentially add a US-specific content requirement. In addition, the USA wants to add a new 50 per cent US-specific content requirement, something that was not in the earlier agreements.

It's no secret that the president is not a fan of NAFTA, but Wednesday's remarks suggested he's open to the possibility of a bilateral trade deal with Canada. "I think it's just a bridge too far", said Wendy Cutler, the Asia Society'sWashington policy director and former chief US negotiator for the Trans-Pacific Partnership trade deal canceled by Trump.

The hard issue of rules of origin will be addressed mostly at the end of the current talks, according to a schedule obtained by Reuters.

Nafta talks, initially scheduled to run from October 11 to October 15 in Washington, may now be extended.

Mexico's influential Business Coordinating Council has urged the government not to be afraid to walk out on the talks, despite the fact that NAFTA is a cornerstone of the Mexican economy, which sends about 80 per cent of its exports to the United States.

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