June 5, 2018 / 1:00 PM / in 13 days

Trump may seek separate trade deals with Canada, Mexico: U.S. adviser

WASHINGTON (Reuters) - U.S. President Donald Trump may seek separate talks with Canada and Mexico in a bid to get individual trade deals with the two countries, White House economic adviser Larry Kudlow said on Tuesday.

FILE PHOTO: The flags of Canada, Mexico and the U.S. are seen on a lectern before a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico, March 5, 2018. REUTERS/Edgard Garrido/File Photo

“He is very seriously contemplating kind of a shift in the NAFTA negotiations. His preference now, and he asked me to convey this, is to actually negotiate with Mexico and Canada separately,” Kudlow said in an interview with Fox News.

“He may be moving quickly toward these bilateral discussions instead of as a whole.”

The United States, Canada and Mexico have been in months of negotiations to rework the North American Free Trade Agreement, which Trump has long criticized as having harmed the United States economically.

In Ottawa, a Canadian official indicated there would be no change in the government’s approach.

“NAFTA is a trilateral agreement and we continue to negotiate that trilateral agreement,” said the official, who declined to be identified given the sensitivity of the situation.

The United States has mused before about separate deals, including when Prime Minister Justin Trudeau held talks with Trump in Washington last October, the official added.

On Friday, Trump said he might prefer to end NAFTA in favor of separate bilateral agreements with the two U.S. neighbors.

Kudlow said the U.S. president was moving toward that scenario.

“He prefers bilateral negotiations and he’s looking at two much different countries,” he said. “Canada’s a different country than Mexico. They have different problems.

“He believes that bilaterals have always been better. He hates these multilaterals ... he hates large treaties.”

Such a move toward separate talks would come at a tense time in U.S. trade relations with the two countries. The Trump administration said on Thursday it was moving ahead with tariffs on aluminum and steel imports from Canada, Mexico and the European Union, ending a two-month exemption and setting the stage for a possible trade war.

Trudeau called the tariffs an affront to the longstanding security partnership between Canada and the United States, and Canada announced retaliatory steps.

In a television appearance on Sunday, Kudlow called the trade frictions a “family quarrel.”

Reporting by Eric Walsh and Doina Chiacu in Washington and David Ljunggren in Ottawa; Editing by Jeffrey Benkoe and Jonathan Oatis

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