Canada and Mexico will reportedly reject America's demands on NAFTA

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"As retailers, we strongly urge all parties to preserve the parts of NAFTA that work for American businesses and to avoid proposals that would damage the USA economy and hurt American families".

The three countries wanted to renegotiate the deal before the end of the year.

"Frankly, I am surprised and disappointed by the resistance to change from our negotiating partners on both fronts", he said during a press conference on Tuesday.

While Mexican and Canadian officials have expressed dismay at the USA proposals, they have publicly taken a less confrontational stance, with three more negotiating rounds scheduled through December. Lighthizer insisted that 50 percent of all auto parts originate from the United States and 85 percent within North America.

Lighthizer said he thought by now the sides would've agreed to issues including digital trade, telecommunications and anticorruption, and there's no indication of changes that would result in a reduction of the USA trade deficit.

Trump withdrew the United States from the TPP - a deal between the US and 11 other Asia-Pacific nations - shortly after taking office.

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The canadian government has said that this proposal was doomed to failure.

"If they react negatively [to USA proposals], it may be enough for the say, 'Enough, we're pulling out, '" said William Reinsch, a veteran Washington trade specialist who is a fellow at the Stimson Center think tank.

The Trump administration has proposed raising the threshold to 85 percent from the current 62 percent. Since it was implemented, Mexico's unemployment has risen and the deal put about two million small-scale Mexican farmers out of business, forcing many of them to migrate to the United States looking for work.

"This is why Canada is so appreciative of Mexico's support for a gender chapter in the modernization of NAFTA. this is a progressive step forward that we can't afford not to take".

The next round of talks will take place in November in Mexico.

Trump has threatened to terminate the trade agreement if Canada and Mexico do not agree to his demands.