On Saturday, Justin Trudeau, the Prime Minister of Canada, rejected a demand of the United States for a sunset clause in NAFTA. However, he said that he was ready to compromise regarding the issue, which is holding up discussions to update the pact that was made during the 1990s-era.
Donald Trump, the President of the United States of America, regularly threatens to pull out of the North American Free Trade Agreement. He insists that Mexico and Canada agree to a sunset clause that would enable a member nation to pull out of the agreement after five years.
Even though Mexico and Canada say that the idea is unworkable, on Saturday, Trump informed reporters earlier that the new deal would include such a provision. Trudeau dismissed the idea.
At the end of a Group of Seven summit in Quebec, he said to a news conference: “There will not be a sunset clause … we will not, cannot sign a trade deal that expires automatically every five years.”
He added: “I think there are various discussions about alternatives that would not be that, and that would not be entirely destabilizing for a trade deal, and I think we are open to creativity.”
He suggested that this could involve “a check in and a renewal.” Some officials say that Mexico and Canada have proposed that member nations gather every five years in order to review the treaty.
Discussions to modernize NAFTA last August. It has effectively stalled as Mexico and Canada resist the demands of the United States for major changes such as the sunset clause and increasing the North American content of autos that were made in the three nations.
Trudeau said that he had informed Trump that the discussions had been made more complicated by a decision that was made by the United States to impose tariffs on Canadian steel and aluminium, primarily for national security reasons. Canada has pledged retaliatory measures on the 1st of July.
Trudeau stated: “I highlighted directly to the president that Canadians did not take it lightly that the United States has moved forward with significant tariffs.
“Canadians, we’re polite, we’re reasonable, but we will also not be pushed around.”