NAFTA renegotiations begin amid high expectations

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Europe

The United States, Canada and Mexico put high expectations on the first round of North American Free Trade Agreement (NAFTA) renegotiations the begin on Wednesday.

Led by US Trade Representative Robert Lighthizer, the US aims to strike a more balanced deal with the two, and hope to support more high-paying jobs for Americans.

The total trade of US with Canada and Mexico has more than tripled, reaching 1.3 trillion US dollars, last year. But trade balance also changed at the same time. US trade with Mexico shifted from a 1.7 billion US dollars surplus in 1993 to a 55.6 billion US dollars deficit in 2016.

In such a scenario, the first priority for the US is to reduce trade deficit as it negotiates the new NAFTA rules.

Job growth is another area of focus for the US. Increased exports under NAFTA have led to nearly five million new US jobs, however, some 682,000 US manufacturing jobs were lost as companies moved to Mexico because of cheap labor.

This is why the US President Donald Trump famously denounced NAFTA as "the worst trade deal maybe ever signed anywhere" during his campaign trail last year. Trump also threatened to pull out of the trade pact, claiming it has destroyed US jobs.

While the US negotiator said the three countries are “ambitious” in this first round of renegotiations, Canada and Mexico said they are looking for a constructive conversation.

Officials from Canada and Mexico also met ahead of the official NAFTA talks, and said the negotiations must be realistic, while hoping to reach a productive result with the US over trade matters.

"We are looking forward to a productive, constructive conversation. And one of the reasons both Canada and Mexico are both extremely confident... is because we have been building now for some time a very strong relationship between the two countries," said Chrystia Freeland, Canadian Foreign Minister.