"If the agreement dies overnight, this is going to have an impact on the daily lives of a lot of people, because all of a sudden there's going to be a scarcity of nearly everything that we consume in Mexico-especially on foodstuffs", says the former office head for S&P's Global Ratings in Mexico City. This week the influential US Chamber of Commerce warned it was time to "ring alarm bells" over the NAFTA talks.
The U.S. Chamber of Commerce on Tuesday accused Trump's administration of trying to sabotage the talks with "poison pill proposals", including demands for more favorable treatment for the U.S. side on vehicle production, and a "sunset clause" to force regular negotiations.
In recent weeks, the Trump administration has sparred with American businesses that support NAFTA and has pushed for significant changes that negotiators from Mexico and Canada say are nonstarters.
Trudeau later said he was optimistic that an agreement would be reached.
Following his visit to Washington, Trudeau is due to travel to Mexico, where he will meet with President Enrique Pena Nieto. Replying to a question, Trump said he would consider a trade pact with Canada minus Mexico, adding that both the U.S. and Canada wanted to protect their workers. "Nafta has benefited millions of people and can benefit millions more", Trudeau said, although he added that Nafta could use a "much-needed upgrade".
All the fanfare was surely a welcome distraction from NAFTA, which experts and observers alike say could well be on the verge of collapse _ a possibility Trudeau seemed to acknowledge Wednesday after meeting with the trade deal's most prominent enemy: U.S. President Donald Trump. In addition, the United States wants to add a new 50-percent US -specific content requirement, something that was not in the earlier agreements. Both leaders are keen to see talks succeed.
"Other automotive powerhouses in the developed world such as Germany and Japan also have complex and integrated supply chains similar to the U.S., with access to low cost production", the group said. "We'll see if we can do the kind of changes that we need".
A new study has warned that the USA auto-parts industry could lose up to 50,000 jobs if the trade pact is terminated, and companies must pay higher tariffs to ship products to Mexico and Canada.
Under current rules, at least 62% of the parts in a auto sold in North America must come from the region to avoid being hit with taxes at the border. Mexican Foreign Minister Luis Videgaray, speaking ahead of the latest round of talks, said terminating Nafta could harm US-Mexico relations and damage co-operation on issues like fighting drug-trafficking. US negotiators have countered with a proposal that would effectively grant the other countries less access, people familiar with the talks say. "Or are we going to take a back seat because we refused to cast aside our differences with our greatest trading allies?"
In an earlier statement, Mr Donohue said abandoning Nafta would create an "existential threat" to North America's national and economic security.
The rules of origin demands are among several conditions that the U.S. Chamber of Commerce has labeled "poison pill proposals" that threaten to torpedo the talks. "We have always understood that draining the swamp would be controversial in Washington".