November 17, 2016 / 11:11 PM / 3 years ago

Canada manufacturers put U.S. ahead of Mexico if Trump ends NAFTA

OTTAWA (Reuters) - Canadian manufacturers want their access to the U.S. market protected at all costs if Canada renegotiates the NAFTA trade deal with U.S. President-elect Donald Trump, even if that means losing the trilateral partnership with Mexico.

Canada's Prime Minister Justin Trudeau answers questions from Cuban university students at the University of Havana, Cuba November 16, 2016. REUTERS/Enrique de la Osa

Amid fears a Trump administration will tear up the North American Free Trade Agreement, the Canadian Manufacturers and Exporters group is lobbying Canada’s Liberal government to prioritize the U.S.-Canada trade relationship, saying a bilateral side deal with Mexico could be worked out separately.

“We spoke to our members, and based on trade stats alone, the priority has to be the U.S. market,” said Mathew Wilson, senior vice president at the CME, which represents some 10,000 manufacturers.

Some 75 percent of Canadian exports go to the United States.

“Mexico is still an important market for Canadian exporters and bilateral business, but if anything did happen with NAFTA, we expect the Canadian government would be able to, fairly quickly, negotiate a deal with both Mexico and Canada,” Wilson added.

The group has reached out to Prime Minister Justin Trudeau and is in discussions with Canadian trade officials to ensure the U.S. market remains open to Canadian exporters, whose business is enmeshed with U.S. manufacturers after 22 years under NAFTA.

Trump railed against NAFTA during his campaign, calling it a U.S. job killer.

The leaders of Mexico and Canada will hold talks this weekend on the potential impact a Trump presidency could have on NAFTA.

Trudeau said last week he was “more than happy to talk about” NAFTA, a day after Canada’s ambassador to the United States said Ottawa would be “happy” to renegotiate the trade pact.

Wilson said some 100 Canadian manufacturers and exporters participated in a conference call with U.S. manufacturers the day after the Nov. 8 U.S. election to plan the sector’s next steps.

In a letter to Trudeau, the group said: “Canada must focus its efforts on ensuring continued access to this critical market and on the opportunities that Mr. Trump’s presidency will offer.” Mexico was not mentioned in the three-page letter.

But Canada’s auto sector, which is heavily integrated with both the U.S. and Mexican industries, said only a trilateral deal would work for Canadian automakers and parts suppliers.

“It (the North American auto industry) really only works if there are no borders,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, which represents Canadian independent parts makers.

“A revision of NAFTA for the auto sector - there’s likely zero support for it.”

Additional reporting by Allison Lampert in Montreal; Editing by Peter Cooney

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