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Canada taking U.S. NAFTA threat seriously, seeks to end logjam

Reuters  |  LONDON, Ontario 

By David Ljunggren

LONDON, Ontario (Reuters) - The threat of the quitting has to be taken seriously, Canada's said on Thursday, even as Ottawa prepares creative ideas to unblock talks to update the tri-nation treaty.

said the had repeatedly stated it could walk away from the 1994 pact between the United States, and has insisted it must be reworked in favor of his country.

sources told on Wednesday they were increasingly convinced the plans to announce it intends to pull out of

"The has been very clear since before the talks started that (a pull out) was a possibility," Freeland told reporters. "I think we need to take our neighbors at their word, take them seriously, and so is prepared for every eventuality."

A said on Wednesday there had been no change in Trump's position on In any case, Trump may have trouble persuading to scrap the treaty, which could be required under U. S. law.

But even the prospect of disruption to the heavily-integrated North American economy knocked the Canadian and Mexican currencies as well as some stocks of firms that rely heavily on North America's integrated economy.

Officials are due to meet for a sixth and second-last round of scheduled negotiations on updating in from Jan. 23-28, but the talks are in trouble.

and are unhappy about U.

S. demands to establish rules of origin for goods that would set minimum levels of U. S. content for autos, a sunset clause that would terminate the deal if it is not renegotiated every five years and ending the so-called Chapter 19 dispute mechanism.

Still, Freeland said it was "absolutely possible to have a positive outcome" in if all three sides showed good will.

"When it comes to the more unconventional U. S. proposals, we have been doing some creative thinking," she said.

"We have some new ideas," she added, but declined to give details. One person familiar with government thinking said some of the ideas related to auto content.

The Canadian dollar steadied against the greenback on Thursday after hitting a nearly two-week low earlier in the session as investors weighed chances of a Bank of interest rate hike next week and worried about Stocks also recovered.

But the Mexican peso fell by the most in nearly three weeks on Thursday, extending Wednesday's slide, on worries over Mexican officials told that if Trump triggered the withdrawal process then would break off negotiations.

(Reporting by David Ljunggren; Editing by Chizu Nomiyama, and Susan Thomas)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 11 2018. 23:11 IST