we will not get to the end of nafta. and it will probably be a fair amont amount of very intense negotiating between here and getting to reformed version. i don't think there is an appetite for blowing it all up other than the president's occasional tweets. when you watch the people the president brought on the cabinet these are relatively sophisticated people and inclination is to have tough negotiations aimed at improving the american position in the treaty, not aimed at blowing it up. >> i would fully agree that in general and without falling into optimism here, nafta has been a very important success story for the three north american economies. if you measure it in terms of trade which is what trade agreements are supposed to do, they are not there to mitigate extreme poverty. it's that's an -- if you look at the trade flows between mexico and the united states and canada the numbers are very compelling. canada's view as number one trading partner and mexico is third largest in the united states, largest buyer of u.

i suspect he voted for nafta. the way i would like to initiate our conversation is to ask the panel at large, i will start with prime minister harper andy -- ask each in succession to address whether they believed nafta at the time of its adoption was the correct policy for north america. secondly do they believe our three economies, on balance, have benefited from the free trade arrangement that nafta structured in north america. and if the answer to each of those is yes, do they believe it is important that we maintain going forward of rules-based free trade arrangement in north america? >> those are pretty easy once was for historical context, in the 1988 election way back when we had the free-trade agreement i was a candidate for the fledgling populist reform party and we were supportive of the free-trade agreement. we were more nuanced on nafta but on balance supportive in 1993. short answer to all those questions is it was the right policy at the time. i could qualify at by saying i think what happened after

exiting nafta would be a big mistake. the agricultural sector has taking shots at the dministrations approach to partners.g nafta delighted to find a cheaper way to do it themselves. think it's a little bit of an empty threat to agriculture in that. say, so i beans. if somebody cuts off their so i beans from us, they're going to have to get them from some other marketplace will free up that marketplace for us. tell, there's n not a world over supply of products.al so unless the countries are to be prepared, i think of a threat to try to agriculture the community than something that he could with. i'm from british columbia, west coast of canada. great anxiety and frustration. this is a century's old debate countries. two hould nafta fail, should the renegotiations fail. should the worst outcome happen, we would then go up into a sector manage to trade relationship with the united states. given that we have 100 years of this one file, we can't seem to land it in this give le, why would that anybody confidence on the ability

cars have far more than 25% content, not even from nafta, from outside nafta, so those are anomalies that are not intended. nafta contente non- in automobiles and manufactured goods in general, the non-nafta content has been growing rapidly and largely at the expense of the u.s.. that is the reason that we have rules of origin as a target. host: isn't that because many of those industries, accurate cameras and safety equipment, they are industries that did not exist in the north american marketplace. competitive,e cost to keep americans employed, keeping those costs down, to keep the north american platform competitive, that is what you do? find we willu will get increased percentages in the rules of origin and i think you will find the car companies will adapt themselves to it. a five-year sunset proposal on a ongoing rolling basis is the administration's position. sec. ross: that is our position -- proposal. host: it is seen as a redline. red lines, bluelines, green lines. those are just colors in a rainbow. this is a big complicated negotiation. the overallis package be one that w

now and even people who didn't be want to talk about nafta want to talk about nafta. do you agree there's an opportunity here because of trump? >> i disagree. we actually had that conversation before hand, before i think it was in june of 2016 or whenever he started his campaign saying that the mexicans were rapists and murderers. if you remember there was an agreement called the or there was an approach that we're looking at called the transpacific partnership and under the transpacific partnership we did the nafta 2.0. everything we're talking about except for the fury and fire was done under tpp. the only bad thing on the third day of the presidency, the president got out of the transpacific partnership and the only one that was really happy was china because we got out of that leadership itself. and trade is very important and i live in la radio. i represent all the way down to the valley. so trade is very important. every day there's $1.3 billion of trade between the united states and the united states. that's over a million dollars a minute. then when he talks a

>> for nafta it could be a big u.s. mexico and canada opt out and decide not to allow foreign investors to utilize the ability to go torbitrati rather than the national courts. it's not clear to me that that's the case. a country like mexico has certainly benefited from investors stayed dispute settlements. the u.s. is arguing that there will be countries that often and it's too early to say. a significant presidential change if it were replicated in other trade agreements and countries opted then from foreign investors perspectives that would be a long-term negative. shery: another issue has always been the chapter 19 dispute settlement panels. the stakes for the u.s. and canada? >> this is a provision that in a very technical area of manufacturing goods trade allows exporters to go to a separate arbitration style panel rather than national courts if they disagree with the tariffs that are being imposed when they are accused of subsidies and dumping. over theas gone down years. canada has identified it as a very big de

is nafta. refocused on the first plan which is nafta and the changes. tactically underneath nafta ovals 24 years ago and the day buteo. and to get into the hypothetical in so let me refresh your memory. that they buy more from us than we buy from them. so if we buy this stuff that comes out of the ground is the result of water of hydroelectric power and the list goes on but it is that the american economy makes better in terms of value added to go overseas. sometimes in the supply chain looking at the immediacy trying to disrupt the supply chain of people you have to figure out where the impact is most likely to be felt at the point to the for this downstream of the point of origin? the answer is further down the stream of. but so who feels the impact the most of there is a disruption from what you import to make better? yes. huge. >> of what to ask what question read on agriculture and to know the of former governor of georgia with the potential decisions a few months ago talking about canadia

the idea of nafta is to lower the cost of products. many changes are made in nafta. if we start putting taxes on products, who is going to pay for those? the consumers are the ones who will pay for the increase of products. >> getting to the question of trump, whether you like him or hate him, he has sparked a conversation about nafta that needs to be had? i agree we need to modernize the nafta. mexico has become a really good ally and friend. those things we need to take in .ccount as well >> do you think trump has provided an opportunity to talk about some of these issues? >> i do. thank you for hosting us. i am so glad you are interested in this conversation. i talked with several people yesterday. it should've a moderator for this topic, we probably need a psychotherapist or social worker to help us talk through some of these issues. interestingly enough, when trump first talked about blowing up much, our community is like laredo. a quarter of our jobs are dependent on trade. a real fear in el paso about how this would impact our local economy. and what it would

may have something to do with nafta. also come from very divisive opinions about mexico and concerns about other countries using mexico and canada as a vehicle to access the united states. the canada does not share the same view of nafta at all. >> a couple of observations. some goes back to the previous panel were speaker gingrich talked about some ways that the number of people in the united states have been left behind. but there's a number of reasons why, could be the education system for retraining or other factors for the manufacturing jobs they have is no longer there are reasons, it might be robotics or whatever but no one stepped in to help with the retraining and allow them access to the jobs. i happen to be in geneva the week the election took place. but the ambassador of finland made an observation. he looked at the midwest states where the votes came in for trump that's where a lot of the jobs were lost. you have middle-age men ottawa job, they didn't see hope her future and his observation is that in many c

plan for renegotiating nafta that at long last is talking about turning nafta into what it should have been all along an engine of growth and job creation for all of north america an aim that would be accomplished by turning the region into a genuine trade bloc and in fact that's what many nafta backers promised or suggested would happen back in the early one thousand nine hundred what is the difference between a genuine trade bloc and what nafta a genuine trade bloc make certain that the vast majority of the benefits of expanded trade and freedom. trade go to the signatories and that countries outside the region aren't able to enjoy that trade agreements benefits without encouraging any sort of without incurring any obligations whatever and it's that latter situation that we're in with nafta right now and the big problem is that an enormous percentage of the goods freely traded inside this current nafta zone the u.s. canada mexico have very high levels of non nafta content which means enormous lost opportunities for workers inside the nafta zone so if i could boil it down to just a se

for a long time in terms of the fairness of nafta. we'll renegotiate. if we can't make a deal, we'll leave it. but maybe that won't be necessary. >> reporter: labor groups hosted protest signs outside the talks as business groups worried requirements for higher share of u.s. parts in autos might kill the deal. ahead of the meeting with the president, prime minister justin trudeau and foreign minister christie of freeland met with the ways and means committee which oversees trade agreements. in prepared remarks, trudeau touted trade with canada and thanks the group for inviting him. committee aides say canada requested it. the fact of the meeting underscores an uneasy alliance with nafta partners worried the white house is proposing purposely unpopular demands in this week's nafta negotiations in order to justify potentially pulling out. this round of nafta negotiations will extend in two days, now set to close on tuesday. the extension is meant to give more time to hash out different topics. for "nightly business report," i'm kayla ta

plan for renegotiating nafta that at long last is talking about turning nafta into what it should have been all along an engine of growth and job creation for all of north america an aim that would be accomplished by turning the region into a genuine trade bloc and in fact that's what many nafta backers promised or suggested would happen back in the early one thousand nine hundred eighty what is the difference between a genuine trade bloc and what nafta a genuine trade bloc make certain that the vast majority of the benefits of expanded trade and freed up trade go to the signatories and that countries outside the region aren't able to enjoy that trade agreements benefits without encouraging any sort of without incurring any obligations whatever and it's that latter situation that we're in with nafta right now and the big problem is that an enormous percentage of the goods freely traded inside this curtain after zone the us canada mexico have very high levels of non nafta content which means enormous lost opportunities for workers inside the nafta zone so if i could boil it down to just

wants to increase content requirements under nafta. must come of content regionally to get nafta duty-free benefits. also introduced a u.s. specific content requirements that we have heard could be as high as 50%. this may be tailored to the auto sector. that is a big area we are hearing from not only discontent from mexico and canada, but also from the u.s. business community, u.s. automakers. vonnie: can i point out, we do have an interview with the majority leader of the house, kevin mccarthy, in the next hour with our colleague david and shery ahn will speak with kevin mccarthy. , ouris our thanks to sarah u.s. economic policy reporter. for more on trade relations between u.s. and canada and what is at stake, let's bring in the former commerce secretary under .eorge w. bush he joins us from our washington, d.c. bureau and is the chairman of the board of the national foreign trade council. seen the samehave reports and her the same reporting we have on what president trump will be asking for in this round. business leaders are not t

now to nafta negotiations. they will wrap up the latest mexico after canada and rejected proposals by the united states. it is impacting many across the industry. erik schatzker is in toronto with more. erik: julia, thank you. i am here with barry maserati. thank you. >> great to be here. erik: you are expecting me to begin with the housing market. start with nafta instead. how do you like that? >> even better. these talks don't appear to be going well at all. happensthe unthinkable and nafta collapses? >> it is easy to think about these scenarios but any trade talks, they go through ups and downs. a lot of information gets leaked as to how they may be doing. maybe progressing. i would not start worrying at this stage. it is early in the process. it has been terrifically important for all three countries. it has increased trade, created lots of opportunities. i am sure in the end most sensible minds will prevail and it will get to a reasonable outcome. that is the scenario i am working under. : other people may

from nafta some years ago, very different time. we did not have all of his pdb level labor standards and environmental standards, if you look under the obama administration, we worked out pretty good environmental and labor standards. and if we were to have applied it i am hoping we can add those same labor and environmental standards to nafta.because we have moved totally in the last 20 years, from the original nafta. >> the thing i would add to that is absolutely yes as to the movement transporting of people. i mean that is just unconscionable what happens in that space. i think putting a light on the trafficking g of humans whether it is exploitation or children. i mean the whole space needs to be shown a bright light on. let's take this question over here. >> first of all thank you for the great conversation. governor francisco cabeza de vaca, you made the voluntary move from the us and mexico, and aspect of immigration that is talked about in the media. what inspired you to make that decision to build your political career in

i will tell you that i told you for i got elected that i would work with him on nafta. group met with the trade representative last week i've had ongoing conversations with different members of the ministration who i think didn't know if i was real that i would work with them on nafta i'm responsibility is to deliver for the working men and women in my district if they're going to do something that's going to help from my responsibility is to deliver on that promise i want to see him deliver on his promise and i'm not seeing there right now. all right and so there were several members of the house there this morning all sharing stories as to how nafta has her constituents in their respective home states i think many of them surprised to see themselves agreeing with the president on such an important accord i think with bipartisan support like this we might see now turn out to be the trumpet ministrations first real big when it. thanks manila for more on this we go to melinda st louis international campaigns director for public citizens global trade watch melinda nice to

now or even renegotiating nafta is getting more complicated by the minute as the fourth round of new negotiations begin in washington this wednesday canada's prime minister justin trudeau said he is confident the deal will be done by the end of the year but it's become clear that mexico canada and the u.s. have very different ideas about how the deal should look like president trump is taking it all in his stride. there was a jovial welcome for justin trudeau as he arrived at the white house but donald trump warned tough negotiations lay ahead on nafta the u.s. president has long opposed the free trade agreement and said he'd be willing to see it come to an end. i said well renegotiated and i mean i think just and understands this if we can't make a deal it'll be terminated and that'll be fun they're going to do well we're going to do well but maybe that won't be necessary but it has to be fair to both countries but the third country and master already seem to be preparing for the worst warning it had no interest in hidden protectionism. we can't allow the free trade agreement to sto

i've been opposed to nafta a long time in terms of fairness of nafta. i said we'll negotiate. justin understands this. if we can't make a deal we'll terminate it. they will do well, we will do well. maybe that won't be necessary t has to be fair to both countries. reporter: do you think there should being limits on the press? >> no. the press should speak honestly. it is not a question of distortion, like the question asked before about 10 times the nuclear capability. i know the capability we have, believe me. it is awesome. it is massive. and so when they make up stories like that, that is just made up. the generals will tell you that. then they have their sources that don't exist in my opinion, they don't exist. they make up the sources. there are no sources. any other question? [shouting questions] we'll decide over next period of time. it will work out with both countries and mexico. reporter: what about the iran deal? >> you will see that very soon. we'll announce that shortly. reporter: [inaudible] free trade with canada? >> sure, absolutely. it is possible we won't rea

i have been opposed to nafta for a long time in terms of the fairness of nafta. i said we'll negotiate. i think justin understands this. if we can make a deal it will be terminated. they're gonna do well. we're gonna do well. maybe that won't be necessary. but it has to be fair to both countries. [ inaudible question ] >> no. the press should speak more honestly. i have seen tremendously dishonest press. it's not even a questio of distortion like the question that was just asked bere ab ten times the nuclear capability. i know the capability we have, believe me, and it is awesome. it is massive. and so when they make up stories like that, that's just made up. the generals will tell you that. then they have theirources that don't exist, in my opinion, they don't exist. they make up the sources. there are no sources. any other question? we'll decide over the next fairly short period of time. i think it's gonna work out very well for both country, and mexico. >> what's your thinking on the iran deal? >> you're gonna see very soon. we're going to be announcing that.

renegotiating nafta ron. because he may not like that because maybe he's on the other side that's what's happening that's why it's so hard to redo these trade deals because there's so many other but you know out of the other side of nafta. in the mexican senate the foreign minister made it clear that his government is not in a joking mood when it comes to the agreement. that we can't allow the free trade agreement to stop being for free trade if red tape restrictions administration tariffs and barriers are introduced this defeats the purpose of the agreement that doesn't suit mexico we have to be prepared to say no mexico is bigger than nafta. an agreement that took twenty years to negotiate it's hard to renegotiate but mexico would be willing to try still mexican negotiators want to avoid the new tariffs that trump suggested to prevent companies from leaving mexico for the u.s. . not many support trumps position even the powerful american lobbying organization the u.s. chamber of commerce is turning its back

renegotiating nafta iran. because he may not like that because maybe he's on the other side that's what's happening that's why it's so hard to redo these trade deals because there's so many other but you know out of the other side of nafta. in the mexican senate the foreign minister made it clear that his government is not in a joking mood when it comes to the agreement. that we can't allow the free trade agreement to stop being for free traders if red tape restrictions administration tariffs and barriers are introduced this defeats the purpose of the agreement that doesn't suit mexico we have to be prepared to say no mexico is bigger than nafta. an agreement that took twenty years to negotiate it's hard to renegotiate but mexico would be willing to try still mexican negotiators want to avoid the new tariffs that trump suggested to prevent companies from leaving mexico for the u.s. . not many support transposition even the powerful american lobbying organization the u.s. chamber of commerce is turning its back

also coming up as the fourth round of negotiations for a new nafta agreement began the parts are colliding donald trump doesn't care too much. and scrapping diesel cars to save the environment a good idea or a waste of resources we'll have the answer. it's time for business on d.w.p. time for you to get us welcome to the world of business was listening closely when the spanish prime minister mariano to haul made a highly anticipated speech about the future of catalonia the stakes are high as a declaration of independence would be harmful to spain the e.u. and the euro the country's main stock index that has been volatile in the weeks following the referendum on independence but searched today investors in the madrid stock exchange were relieved and markets closed more than one percent higher following a speech by the spanish prime minister mariano rajoy who said he is not going to negotiate with separatists in a much awaited speech in parliament. separate system and have valid reasons to support it is not big they have the votes and the authority to govern the cars alone your region but th

also coming up as the fourth round of negotiations for a new nafta agreement begin the parts are colliding donald trump doesn't care too much. and scrapping diesel cars to save the environment a good idea or a waste of resources we'll have the answer. it's time for business on the w.b. and how you got to get us welcome to the world of business was listening closely when the spanish prime minister mariano to haul you made a highly anticipated speech about the future of catalonia the stakes are high as a declaration of independence would be harmful to spain the e.u. and the euro the country's main stock index that has been volatile in the weeks following the referendum on independence but searched today investors in the madrid stock exchange were relieved and markets closed more than one percent higher following a speech by the spanish prime minister mariano rajoy who said he is not going to negotiate with separatists in a much awaited speech in parliament. separate system and have valid reasons to support it is not big they have the votes and the authority to govern the cars alone your regi

also coming up as the fourth round of negotiations for a new nafta agreement begin the parts are colliding donald trump doesn't care too much. and scrapping diesel cars to save the environment a good idea or a waste of resources we'll have the answer. it's time for business on the w.b. and how you got to get us welcome to the world of business was listening closely when the spanish prime minister mariano to haul made a highly anticipated speech about the future of catalonia the stakes are high as a declaration of independence would be harmful to spain the e.u. and the euro the country's main stock index that has been volatile in the weeks following the referendum on independence but searched today. investors in the madrid stock exchange were relieved and markets closed more than one percent higher following a speech by the spanish prime minister mariano rajoy who said he is not going to negotiate with separatists in a much awaited speech in parliament. separates us didn't have valid reasons to support it is not big they have the votes and the authority to govern the cars alone your region

i will tell you that i told you for i got elected that i would work with him on nafta. the group met with the trade representative last week i've had ongoing conversations with different members of the ministration who i think didn't know if i was real that i would work with them on nafta i'm responsibility is to deliver for the working men and women in my district if they're going to do something that's going to help them my responsibility is to deliver on that promise i want to see him deliver on his promise and i'm not seeing there right now. all right and so there were several members of the house there this morning all sharing stories as to how nafta has her constituents in their respective home states i think many of them surprised to see themselves agreeing with the president on such an important accord i think with bipartisan support like this we might see now after turn out to be the trumpet ministrations first real big win at. thanks manila for more on this we go to melinda st louis international campaigns director for public citizens global trade watch melind

it is our manufacturing jobs since nafta... it is an unbelievable numberand nafta... it is an unbelievable number and statistics. so what are we doing? my administration policy, tax reform, trade policy, will return significant manufacturing jobs to our country. everything is going to be based on bringing our jobs back, the good jobs, the real jobs. with me isjulian howard, from the investment firm gam. good morning. it will be interesting. i would like to be a fly on the wall. i think it will be mega all could. donald trump is focused on the big trade deficit with mexico but it affects canada as well because it is part of the 02 motive chain. —— boka chain. what he wa nts motive chain. —— boka chain. what he wants is the 50% of cars to have components coming from the us. currently, 62% come from nafta. an integrated supply chain solution. the trump administration once more centric system. that would com pletely centric system. that would completely change that free trade deal. i would assume that canada and mexico would not be happy with that. how doesjustin

so we'll see what happens with nafta. i've been opposed to nafta for a long time in terms of the fairness of nafta, and i said we'll renegotiate and justin understands this if we can make a deal it will be terminated and that will be fine maybe that won't be necessary, but it has to be fair to both countries. [ inaudible question ] >> no. the press should speak more honestly i've seen tremendously dishonest press. it's not even a question of distortion like the question that was just asked before about ten times the nuclear capability i know the capability that we have, believe me, and it is awesome. it is massive and so when may make up stories like that, that's just made up and the generals will tell you that and then they have their sources that don't exist, in my opinion. they don't exist they make up the sources there are no sources any other question [ inaudible question ] >> we'll decide over the next fairly short period of time, but i think it's going to work out very well for both countries and mexico >> what did

mexico is bigger than nafta. reporter: an agreement that took 20 years to negotiate is hard to renegotiate. but mexico says it is willing to try. still, mexican negotiators want to avoid new tariffs trump has suggested to prevent companies leaving mexico for the u.s. not many support trump's position. even the u.s. chamber of commerce is turning its back. >> we have been patient, full headed and constructive. but let me right now the forceful and direct. there are several poison pills, proposals still on the table that could doom this entire deal. reporter: that could spell trouble for the three country's economies. they are each other's most important trading partners. many companies depend on nafta and for them, there is no plan b. javier: many companies are watching the unfolding negotiations. let's bring in jens korte, our financial correspondent on wall street. thank you for being here. we know how important the nafta agreement is and yet president trump seems quite relaxed about it. our investors just as co

we will see what happens with nafta. nafta aeen opposed to long time in terms of the fairness. i said we will renegotiate and i think justin understands this. if we can't make a deal, it will be terminated and it will be fine. maybe that won't be necessary. it has to be fair to both countries. [inaudible] >> know, the press should speak more honestly. i have seen tremendously dishonest press. it's not even a question of distortion. justthe question that was asked about 10 times the nuclear capability. i know the capability that we have, believe me and it is awesome. it is massive. when they make up stories like that, that's just made up. the generals will tell you that. they have their sources that don't exist in my opinion. they make up the sources. there are no sources. any other question? we will decide over the next fairly short period of time. i think it's going to work out very well for both countries and mexico. you're going to see very soon. you will be announcing that very shortly. sure. absolutely. it's possible we won't be able to reach a deal with one or the other.

also coming up the future of north american free trade nafta negotiations round for kick off today the u.s. canada and mexico are ready for tough talks can the neighbors hold the deal together. i bring guy. it's good to have you with. the spain has put catalonia on the clock and on notice prime minister mariano rajoy has given the regional government until monday to say whether it has declared independence from the rest of spain or not has promised to do everything possible to prevent the breakaway even threatening to suspend catalonia is all tom looked in a standoff spain's prime minister is determined to not give an inch speaking to parliament in madrid mariano rajoy again insisted that catalonia his independence referendum was illegal and he rejected offers of international mediation. the force but he believes that it is not possible to accept a dialogue to agree on what is expressly forbidden by the constitution to negotiate over the sovereignty belongs to all spaniards and the unbreakable unity of spain. it was a clear abuse to cattle and president has pushed him all these calls f

the nafta agreement is vital for their survival. well that's why it's wrong for comes out and that's it from me and the business team here and then i'll have an update for you in the next hour and if you don't already do follow us on twitter and facebook before you go here's a real time check on global markets by. it's a wild week on v.w. there they couldn't think that we can do that with you because you give it everything revolves around the animal kingdom and a two legged friends. with small black spots on a case of why they always cut a handsome figure out how to don't make sure get its name we try to find out by connecting the dots. your robot. d.w. . nationalists are on the right you know why or why don't you know me what i am taking almost straight to highlight different shades of nationalism and to find out what does nation me to you. the show you sure you join the conversation here on to w. on twitter and on facebook. crime fighter. there's the new season of radio crime thrillers begins. moving. motion domestic violence cybe

things are not looking good for nafta. it's not just an issue that democrats have had a problem with the president about and potentially payroll taxes, but the republican party -- traditionally a varied free ,rade oriented already -- party will have a lot to save the president decides unilaterally pull out of nafta. it's unclear how the president is considering moving ahead, but taking quite seriously the allegations and speculations that he is inclined to withdraw from the renegotiation with nafta entirely. david: this is not without precedent. if that were not happen, what with the role be with congress? we had congressman leonard lance on talking about the potential to see the president go down that path. how much power to they have over determination of a trade you like nafta? ms. treyz: the power is limited to stop the president from kicking those wheels of the motion. their power is significant, because a big bunch of the nafta trade agreement has been passed into law, and are going to acquire -- require law to unwin

in nafta talks. we will talk to commerce and bill pascrell, ranking members of the house ways and means trade subcommittee, about the answers and future of nafta and the congressional agenda. that is next. this is bloomberg. ♪ retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. vonnie: live from bloomberg world headquarters in new york and london, i am vonnie quinn. mark: i am mark barton. this is "bloomberg markets." let's check in on bloomberg "first word." taylor riggs has more. taylor: in the u k, inflation has hit 3% for the first time in more than five years. the bank of england governor mark carney reaffirmed that the

and canada doesn't bode well for nafta. a lot of business people think that this is all a pretext for getting out of the nafta deal i mean relations between the united states and canada which are always assumed to be very close are probably at the poorest level they've been in our lifetime for many decades and it took down trying to make that happen a lot of business leaders in the u.s. chamber of commerce normally a staunchly republican organization things that trump is trying to use these negotiations as a pretext to kill nafta there is a civil war going on in the republican party between the president republican president donald trump and the republican establishment in congress the republican establishment is very close to business but this is a deal the nafta the idea of killing nafta is anathema to business it would create chaos in a lot of american industries farming and particularly automobiles and they are dead set against ending nafta and you know who supports ending nafta labor unions who are not normally allies

actually had an existing free-trade agreement before nafta. so some people think they could fall back on that agreement. whereas, canada and mexico didn't have that arrangement. before they would fall back on the w.t.o. rules, which would raise tariffs. and i guess part of the irony of this is the u.s. would actually face higher tariffs into mexico, than mexico would into the u.s., because mexico is considered a developing country. >> sreenivasan: all right sarah mcgregor of "bloomberg news." we'll try to stay on top of this story as it develops. thanks so much. >> thank you! >> sreenivasan: as we reported earlier, spain's prime minister, mariano rajoy, announced today he'll remove the separatist government of the secession- minded region of catalonia. that means the central government in madrid is planning to exercise direct rule over catalonia, a wealthy region where 7.5 million of spain's 46 million people live. the unprecedented move is an attempt to stop catalonia's drive for independence, which has gained momentum in the past month. in t

nafta was her a good deal. nafta was a very good deal. >> i think it was the right thing to do. from the full point of the united states, consider what would have happened if we had defeated it in terms of the rhetoric today coming out of the national administration. if we had defeated it, we would have had another billion or so undocumented immigrants from mexico. as there is economy took a terrible hit we would have been widely low this throughout latin america the one place where our trade volumes went way up in eight years i was president. we had more games in exports in latin america than any other part of the world. and it left us all stronger with more diversified economies. now, all trade agreements have winners and losers. but, there have been-- i want to make three quick points. number one, there have been lots of independent studies done, which show that the effects of the numbers jobs, not only in the united states, but canada and mexico have been modest. what has changed is the nature of the jobs. jobs tied to exports ironically in all three of our countries for ver

the net effect of nafta was positive. it was positive for economics and our political relations between ourselves and mexico. between 2010-2014, in the last campaign you will find this hard to believe, there was 0 net in migration from mexico to the united states because they had their own economy and then president calderon of mexico -- started producing 100,000 engineers a year. compared with america, three times its size, producing 120,000. we need to grow together. started with us, canada and mexico. if the world goes to hell in terrorism and everything, we have to hold tight to each other. as far south as we can get. people who believe in freedom and democracy. and if the world gains good sense again and starts moving away from terror and oppression, toward more economic and political integration, then we need a base from which to fly. this is it. i think we did the right thing. in the last election at home people felt left out and left behind and nafta was a convenient target. that is what i think. [applause] >> it

they share their experiences as heads of state and they looked at nafta. the trump administration is currently re- negotiating that agreement. ♪ ♪ ♪ ♪ ♪ ♪ ♪ >> hello, welcome. lay bac [speaking in native tongue] [speaking in native tongue] [speaking in native tongue] [speaking in native tongue] >> thank you for being here. it is a great honor for me to be here. i'm somewhat intimidated even though it several years since the prime minister in the president were in office, i'm still intimidated when i'm around them. i do want to point out, our titles start with the same words, former [laughter] so, that makes a sort of equal >> if i had heard you before [inaudible] [laughter] you would have a lot of reasons to take that back. it's so bright, i can't see, but i know ramon is here somewhere. over there, i wanted to acknowledge ramon who was actually my partner when i was a master. he was the canadian ambassador to the united states and was a remarkable career foreign service officer for canada and we did work very well together, which i think is

sherry: is the nafta trade negotiations -- if the nafta trade negotiations go through, what can canada fall back on? josh: they have a safety net, but it is like a car sitting in a barn for 30 years. you have it that you need to do a lot to get it running again. they are expecting negotiations of their own to get it running again. both have wto rules to fall back areith autos, so there exit path for canada, but canada and mexico have said they will not luckily from the table even though they are rejecting individual proposals. it is up to the u.s. to walk away or haggle and find common ground. vonnie: where would you find common ground on the whole idea of dairy farming and poultry and those tariffs? josh: been tpp, canada gave up kitchen of its markets. -- give up a chunk of their markets. of theentially gave 3.5% market to the tpp nation saying, do you want to cut of the market? and they turned around to subsidize dairy farmers. there are avenues to do that. to blow up their dairy aspect as the u.s. has done is off. sherry: do you expect negotiations out of the window now? eric: ther

but that real effect from nafta was positive. and without political relations between yourselves and mexico. >> if you hear that rhetoric is hard to believe but they're well is the road net immigration from mexico to the united states because they have it economy now and then starting to produce 100,000 per year as compared with america three times its size. we need to grow together. with u.s. canada and mexico if the world goes to hell the terrorism in the bombing we have to hold tight to each other as far south as we can get people and relieve in freedom and democracy and of the world achenes good sense mature and political integration in selling think we did the right thing but in the last election here at home some people feel left out and left behind and that was a convenient target. that is what i think. [applause] >> but it does need some work. there are a lot of the issues that we did not deal with. so i keep believing if the american administration will locked in good faith with those negotiators we can find a win-win so

we start off at nafta. trade ministers from us, bexsero, and canada, have agreed to additional talks. they start when they left off in 2018, where they have big issues to discuss. —— mexico. the agreement is at risk because of the america first agenda of donald trump. earlier, i asked next boat have lately it is that they come to an agreement. this will be tricky to get done. the real challenge is no one other than donald trump himself had a particular problem with nafta. and the few things they wanted to upgrade in nafta were things that donald trump had pulled them out of early this year. other than donald trump, there is not a large constituency being for an upgrade of nafta. was the trump administration hoping that with all the differences amongst the three countries, that mexico and canada would pull out of one before the end of the year? there are a number of people suggesting that given the number of what you might argue our poisoned pills that the united states have tabled in the gender, that me

mark: i think nafta, in terms of the world we live in, the complexity around nafta and the elongated negotiations that are happening around the trade agreement is it is a difficult environment to trade. maybe you see some moves that had a little bit of supportive comments coming out of the trudeau and trump meeting. tradely think that the you have around nafta is thinking about who the winners and losers are, if you start to renegotiate and gravitate more toward a canadian focused nafta agreement. i think the way you want to look at it is simplistically. if you think about which countries have the largest trade deficits, it is the united states and what is the reaction of the trade officials is they want to eliminate the u.s. trade deficit with mexico. that would have to come by trying to destroy the supply chain a little bit on the mexican side. the rules of content originated, which is 50% of the goods manufactured in the united states, this is geared toward the auto sector. if you think about which currency would lose in this kind of negotiation strategy, it is one where the canad

i'll talk to canada's foreign minister about trump's nafta strategy. but first, here's my take. can burns and lynne novak's d z documentary on the vietnam war is filled with stories of soldiers on all sides of the conflict. but the most tragic aspect was to hear linden johnson on tape before full u.s. engagement, admitting that the war could not be won. president johnson's statements are -- in may 1964, when the united states had fewer than 20,000 troops in vietnam, serving only as advisers and trainers. this is what president johnson said to his national security adviser, george bun did. bundy. >> i stayed alast night thinking about this and the more i think about this, i'm afraid we're getting into another cakorea. i don't think it's worth fighting for and i don't think we can get out. >> johnson understood even then that vietnam was not actually vital and it could easily become a quagmire, and yet he could never bring himself to the logical conclusion, withdrawal. like so many presidents before and after him, he could not see how he could admit failure. and so johnson increas

, but i've been opposed to nafta for a long time in terms of the fairness of nafta i said we'll renegotiate and i mean i think justin understand this, we can't make a deal, it'll be terminated. >> reporter: the president raising an sbeeging possibility here which is a reimagined nafta with just one of the three participants mexico or canada and the united states, but maybe not all three. here's what the president said on that point. >> it's possible we won't be able to reach a deal with one or the other. but, in the meantime, we'll make a deal with one. we have a chance to do something very creative that's good for canada, mexico, and the united states >> interestingly the prime minister was asked in french, while he was sitting alongside the president who doesn't speak french how the relationship with the united states was going, and what the tone was between the two men. and he responded in french to the media from canada saying it's great to be here, always good to be among allies and friends. so both sides very much putting an upbeat face on the meeting today. even though there was no j

of course if the us is going to blow up nafta then ca nada's course if the us is going to blow up nafta then canada's immediate interest is to maintain its close trading relationship with the us. but we are not there yet and donald trump has a lot of things about a lot of things. he also said, we'll see, when asked if nafta was dead. usually people get fired when people say that. i think he has been saying he intended to cancel nafta since he was a candidate. about 100 days into his presidency he mused about cancelling it there and then and decided quite publicly and theatrically not to do so at the time. it is always difficult to know with donald trump which of his comments are meant for effect and which he genuinely believes. this is co re which he genuinely believes. this is core interest to canada, this is central economic interest, so i think the canadian government is taking this extremely seriously right now. obviously he will talk about bombardier and i guess the british prime minister will be watching the outcome of that. one of the questions he might ask the president is why i

renegotiating nafta ron. because he may not like that because maybe he's on the other side that's what's happening that's why it's so hard to redo these trade deals because there's so many other but you know out of the other side of nafta. in the mexican senate the foreign minister made it clear that his government is not in a joking mood when it comes to the agreement. that we can't allow the free trade agreement to stop being for free traders if red tape restrictions administration tariffs and barriers are introduced this defeats the purpose of the agreement that doesn't suit mexico we have to be prepared to say no mexico is bigger than nafta. an agreement that took twenty years to negotiate is hard to renegotiate but mexico would be willing to try still mexican negotiators want to avoid the new tariffs that trump suggested to prevent companies from leaving mexico for the u.s. not many support trumps position even the powerful american lobbying organization the u.s. chamber of commerce is turning its back.

now, i assume that the mexicans are definitely trying not to undermine nafta. that could only mean by implication you think your u.s. counterpart is trying to do that, correct? >> no. what i said exactly what i meant, which is i do think it's important that all parties bring to the table positive intent, as canada has. but what i also said is in order to get there, we all have to be looking for, as vice president mike pence said at the governors meeting in rhode island at the beginning of the summer, we all have to have a mindset that says let's get a win, win, win, a win for everybody. and if one party has a winner-take-all attitude, then it's not going to work. >> do you get the sense that the trump administration views this issue sort of fundamentally differently than others? it seems as though it views, for example, just the existence of a trade deficit as inherent evidence that the deal is bad, which would in a sense almost mean that free trade is bad? >> look, it is certainly the case that this u.s. administration has a strong view about trade deficits as

what congressman is the one thing you think most needs to be fixed under nafta? you wave a wand and fix it, what is it. >> customs facilitation. we need to make sure we eased the process of how we move goods across and it's not only the procedures, but we have to make sure we have the right infrastructure that bridges the equipment to move and create it as efficiently as possible. >> part of that is we need to move stations in the interior and talk about that. >> our produce farmers have suffered greatly in previously years. recently we lost almost all our tomato production, watermelon production is not profitable anymore, we have competing interest over each growing season so that is one of the things we need to work out. right now neither side is winning. no one's making a profit. we need to fix that so the american farmers to make a profit. mexican farmers can make a profit and we can all live in harmony. >> those labor issues, when we create conditions where we strengthen a middle-class on our side and where we create a strong middle-class on the mexican side