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Trump Looks To Renegotiate NAFTA With Canada

ARI SHAPIRO, HOST:

President Trump has said repeatedly that while NAFTA has been horrible for the U.S., it's been very good for Mexico and Canada. He recently pointed to some very unfair things that he says Canada has done - blocking U.S. dairy imports. The White House retaliated this week by imposing new tariffs on Canadian lumber. This has worried a lot of experts along the border. They say the U.S. and Canadian economies are so intertwined that a trade fight between the two could be risky. North Country Public Radio's Brian Mann reports.

BRIAN MANN, BYLINE: Here's one way of looking at U.S.-Canada trade. On the U.S. side of the border, you have farmers like David Fisher in Madrid, N.Y. He's furious that Canada added new restrictions on dairy imports last year.

DAVID FISHER: President Trump has a point when he talks about trade and negotiating better.

MANN: Fisher's farm is about eight miles from the Canadian border. He says he's on the front line of a trade fight that needs to happen.

FISHER: You know, I think we need to negotiate tough. And you know, there's a little bit of gamesmanship involved. And we'll see where it goes.

MANN: Here's the president talking in recent days about the United States' biggest trade partner.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: Canada - what they've done to our dairy farm workers is a disgrace. It's a disgrace.

MANN: Trump signaled he's willing to scrap NAFTA. But Prime Minister Justin Trudeau called the White House yesterday and urged Trump to negotiate first. This kind of brinksmanship alarms experts on cross-border trade, but some in Canada concede it could work. Ian Lee is a professor at Carleton University in Ottawa. He says because of America's far greater economic clout, Trump could force Canada to make big concessions.

IAN LEE: I'll be really, really blunt and really crass. We have no choice. We are one-tenth the size of the United States.

MANN: Lee says a new trade deal might open dairy markets in Canada and ease disputes over lumber, but it could also crack open much bigger industries like banking and telecom and airlines that for now at least are closed to American companies. Still, Prem Gandhi at the State University of New York Center for the Study of Canada says the threat of dismantling NAFTA is too big a bargaining chip to put on the table.

PREM GANDHI: I think that will be a very costly and very - I shouldn't say stupid mistake, but it will be a mistake.

MANN: Gandhi says most U.S.-Canada trade is more complicated than that dairy farm we visited. It's not just one producer selling one product across a border. Instead, thousands of companies have factories and shareholders and investors and workers on both sides of the border.

GANDHI: They're so intertwined that you cannot distinguish between the two. There is no such thing as made in U.S. and made in Canada.

MANN: He means that individual products often cross the border two or three times before they're ready for market. Garry Douglas is a trade expert with the Chamber of Commerce in the border city of Plattsburgh, N.Y. He says he hopes President Trump's tough talk is a negotiating position, a way to frame the NAFTA talks before they start. But in the wake of Brexit in Europe and Trump's decision to scrap the Trans-Pacific Partnership deal, Douglas says investors and companies on both sides of the border are rattled.

GARRY DOUGLAS: Nobody has ever seen diplomacy or trade relationships or negotiations handled this way, a rough-and-tumble, hardball, New York real estate-style of negotiating.

MANN: This time there's a lot more at stake than a real estate deal. For NPR News, I'm Brian Mann. Transcript provided by NPR, Copyright NPR.