Canada declares readiness to ignore talks on NAFTA if need be, but its foreign trade is strongly dependent on the U.S. and they can hardly afford rejecting it, analysts say. Officials from the three countries of the agreement will get together in the capital of Canada this week to continue negotiations on improving NAFTA, having lots of hard issues to resolve.
U.S. President says he is set to leave the pact if no crucial changes occur. Canada in its turn made a statement that it could abandon the deal in case the United States insist on discarding an important dispute-settlement mechanism.
The U.S. is the largest trading partner for Canada which takes in around 75% of Canadian exports, along with that companies prosper working in the neighbourhood of the globe’s top economy. Low logistics expenditures, common language and similar working culture contribute to successful cooperation.
No NAFTA means a 3.5% tariff for Canada and Mexico goods exported to the U.S., which is standard for World Trade Organization members.
Export Development Canada’s forecast made in 2016 said that this kind of scenario would result in the country’s GDP fall by 1.9% per year and a disappearance of lots of working places.