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Trade war

China and Canada to pursue FTA despite new NAFTA's restrictions

Beijing claims provisions on nonmarket economy will not affect negotiations

SINGAPORE -- China has shown a renewed willingness to negotiate a free-trade agreement with Canada, despite a clause in the new trade agreement between the U.S., Canada and Mexico designed to restrict members from signing such deals with Beijing.

Chinese premier Li Keqiang called for stronger trade ties during a bilateral meeting with Canadian Prime Minister Justin Trudeau in Singapore on Wednesday, on the sidelines of the East Asia Summit and other related events such as the Regional Comprehensive Economic Partnership leaders meeting.

"We have noticed that Canada has made clarification on a new trade agreement reached among the United States, Mexico and Canada [USMCA], saying that the agreement will not affect Canada's decision on FTAs with other countries," Li was quoted as telling Trudeau by state news agency Xinhua.

The United States-Mexico-Canada Agreement was agreed at the end of September and replaces NAFTA, or the North American Free Trade Agreement.

The USMCA stipulates that, before entering free-trade talks with a nonmarket economy, a member country must notify the other participants, who are then free to withdraw from the deal.

Since Washington considers China to be nonmarket economy, the clause effectively restricts Canada and Mexico from negotiating trade deals with Beijing. The Chinese government has criticized the clause.

After the meeting, International Trade Minister Jim Carr told reporters that the Canadian government remained interested in a deal, The Canadian Press news agency reported. Carr was in Beijing on Monday for bilateral economic meetings.

Trudeau in mid-October claimed that the clause would not stand in the way of pursuing greater trade with China.

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