Some experts said today that China's hopes of negotiating a free trade agreement with Canada or Mexico have been stifled by a clause in the North American Free Trade Agreement (NAFTA) aimed at banning such deals with non-market countries.
This clause specifies that if a current NAFTA partner enters into a free trade deal with a non-market country such as China, other NAFTA parties will be able to withdraw from the agreement within six months.
The clause, which has sparked controversy in Canada, is in line with the efforts of U.S. President Donald Trump to isolate China economically and prevent Chinese companies from using Canada or Mexico to ship duty-free products to the United States.
If this repeated in other U.S. negotiations with the EU and Japan, it could help isolate China in the world trade system. China has asked the World Trade Organization to recognize it as a market economy, a move that would severely limit western trade defenses against cheap Chinese goods.
