Canada Pledges to Stick With NAFTA Talks, Mexico Works on Plan B

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At the NAFTA talks, Canada has introduced a proposal aimed at compelling Mexico to pay workers higher wages and do away with so-called "yellow" unions that represent employers rather than employees.

A new report claims the proposing the lifespan of any new trade deal be limited to five years.

Trump has made no secret that he prefers bilateral trade deals, and skeptics wonder whether the US demands are part of an "America First" strategy created to ensure the current talks fail.

Mexico's foreign relations secretary says his country won't accept "limited, managed trade", an apparent reference to demands for higher United States and regional content rules on products like auto parts.

A collapse of NAFTA would wreak havoc throughout the North American economy, disrupting highly integrated manufacturing supply chains and agricultural exports with steep tariffs that would snap back into place. They are also seeking to halt the shift of vehicle production and jobs to Mexico from the United States. "This thing is going into the toilet", Jerry Dias told reporters on Thursday.

For now, Trudeau and Pena Nieto vowed at the close of their bilateral meetings Thursday to remaining at the bargaining table for NAFTA, despite hard line proposals from the U.S.

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Mexican Finance Minister Jose Antonio Meade, seeking to downplay any setbacks in the latest round of negotiations, said on Friday that tension in the talks was only natural.

He was speaking alongside Canadian Prime Minister Justin Trudeau, who later said Canada was "braced" for Trump's unpredictability. The Mexican government is exploring other markets beyond the U.S.

Ahead of the fourth round of talks, U.S. Agriculture Secretary Sonny Perdue hinted the U.S. would be looking for increased access to Canada's dairy.

On automotive rules of origin, NAFTA negotiators face tough new USA demands to increase regional vehicle content to 85 percent from 62.5 percent, with 50 percent required from the United States, according to people briefed on the plan.

Both demands would upend the current automotive sector, with the proposal being described by industry analysts as a "poison pill" for the trade agreement.