Freeland hails Trump's 'sensible' suggestion of NAFTA talks extension

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Trump told the Wall Street Journal he was "a little flexible" on the timetable for the North American Free Trade Agreement (NAFTA) talks, saying he did not want to rush a deal prior to upcoming elections in Mexico.

Speaking about one of his signature campaign promises with The Wall Street Journal, Trump said a renegotiation of the 1994 North American Free Trade Agreement - which includes Canada, Mexico, and the USA - could provide cost savings to the US that could be used to pay for the wall.

He threatened to terminate NAFTA unless they could reach a renegotiation of the trade deal, but said he was waiting until after the presidential elections in Mexico. He didn't elaborate on what that means.

The officials, speaking Wednesday on the condition that they not be identified, declined to say whether they now think the likelihood of Trump following through on repeated threats to quit the pact now exceed 50%.

It is unclear what mechanism would go into NAFTA that would cause Mexico to indirectly pay for the structure, which Trump promised as a candidate.

She says Canada is prepared to spend as much time as it takes to get a good deal. "Guess what? Mexico's paying".

Since the earliest days of his presidential campaign, Trump insisted he would build a wall between the USA and Mexico as a way to stymie the flow of immigrants - and that Mexico would pay for the project.

Shortly after Trump's inauguration past year, plans for a meeting between the president and his Mexican counterpart fell apart over the issue of paying for the wall.

The next round of talks is scheduled for January 23-28 in Montreal.

Canadian officials say if Trump does announce a US withdrawal, it could be a negotiating tactic created to win concessions.

"Montreal is going to be a decisive round", said Wendy Cutler, a former USA trade negotiator who is now vice president at the Asia Society Policy Institute in Washington.

Trump withdrawing from NAFTA "was always a risk, but that risk is clearly more elevated now", said Brian DePratto, senior economist at Toronto-Dominion Bank.

While she puts the chances of US withdrawal at 50-50, "it's too early to throw in the towel on these negotiations", Cutler said.

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