The discussions on the fate of North American Free Trade Agreement (NAFTA) have been under and over and for many, this could mean that the deal would ultimately fall apart.
However, there are still a few who remain optimistic. Caisse de Depot et Placement du Quebec CEO Michael Sabia is one of them.
In a Thomson Reuters Breakingviews event in Toronto, Sabia said should U.S. President Donald Trump terminate the deal, the United States would eventually negotiate a new deal with Canada.
“If that happens, my view is that is just a prelude to another negotiation. We need to think about that in the context of making sure that we handle things in a way that we are well positioned for the subsequent negotiation because it’s hard to imagine that there is never another trade agreement,” Sabia told Reuters.
He stressed that other factors could help ease the impact of NAFTA talks falling apart.
“The future sources of jobs and growth in the Canadian economy are going to come from elsewhere. It’s not as though Canada is some baby seal waiting to be slaughtered,” he said.
In a separate Reuters report, Trump said ending NAFTA would result in the best deal for the three parties.
“A lot of people are going to be unhappy if I terminate NAFTA. A lot of people don’t realize how good it would be to terminate NAFTA because the way you’re going to make the best deal is to terminate NAFTA. But people would like to see me not do that,” Trump said.
This remark came before trade negotiators from the three countries converge for the sixth round of negotiations to update the deal.
Several groups composing of lawmakers, agricultural and industrial players have presented their case for Trump not to pull out US from NAFTA.
For instance, farm-state lawmakers said withdrawing from NAFTA would result in a major tariff increase on US corn and other crops sold to Mexico. This would, then, hurt Trump’s political support base in the rural areas.
Trump’s recent comments validate the concerns by some Canadian government officials. According to Reuters, these government sources are increasingly convinced that Trump will soon announce the US’ departure from NAFTA.