Daily chaos of Trump presidency creating turbulence for NAFTA talks

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As negotiators hunkered down at a Washington hotel for the second day of talks to overhaul the North American free-trade agreement, the man who spurred the renegotiation was busy fanning the flames of a racial crisis.

Before the day was out, U.S. President Donald Trump defended monuments to the Confederacy, repeated an apocryphal Islamaphobic story and heard a senator from his own party question his stability and competence.

The incidents highlighted a wild card in the talks on the deal covering $1.3-trillion worth of trade among the United States, Canada and Mexico: How the daily conflagrations consuming Mr. Trump's presidency will affect the high-stakes discussions.

Read more: U.S. NAFTA demands on auto rules of origin could backfire, experts say

After trilateral and bilateral meetings on Wednesday among Foreign Affairs Minister Chrystia Freeland, United States trade czar Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo, the politicians on Thursday left the grunt work to a small army of professional negotiators.

Canada alone has 75 negotiators at the talks, representing 13 government departments. At least 27 topics are to be covered by Sunday, including dispute-resolution panels, rules of origin on autos and other manufactured goods, investment and the digital economy.

The three sides are moving faster than in a typical trade negotiation, eschewing the usual preliminary discussions to move straight to tabling proposed texts of changes to NAFTA. They are merging the texts in areas of agreement and sorting out what will require negotiation. Subsequent rounds of talks will take place in Mexico and Canada.

Christopher Sands, director of the Center for Canadian Studies at Johns Hopkins University, said reaching a deal will largely depend on the technocrats' ability to insulate their talks from what is happening outside.

"Each leader can derail the talks with a social-media slip or quip," he said. "After this turbulent start, the ability of the professionals to keep their bosses out of the room, literally and figuratively, is uncertain."

Whether it would be good or bad for Canada if negotiations stall depends on who you ask. Canadian government sources say some officials believe it would not be a problem if talks unravel or drag on indefinitely, as that would leave the current deal in place. Others prefer a fast resolution because it would end the uncertainty hanging over NAFTA-dependent businesses.

The United States wants a quick deal so Mr. Trump can fulfill a campaign pledge. Mexico also wants to get things done before its election next year, which a protectionist candidate has a realistic chance of winning.

The talks could hardly be opening at a more turbulent time.

The day before negotiations started, Mr. Trump caused an uproar by defending white supremacists who staged a violent rally in Charlottesville, Va., over the weekend that led to three deaths. The President called some of the white nationalists "very fine people" and put blame on anti-racism activists for the violence.

The comments caused an exodus of chief executives from two of Mr. Trump's advisory councils, leading him to disband them. Most of the U.S. business community is favourably disposed toward free trade.

Ms. Freeland on Wednesday batted away questions about the difficulty of dealing with the Trump administration when it was being abandoned by the business community.

"It is not up to Canadians to choose who is the government of the United States," Ms. Freeland told reporters at the Canadian embassy.

On Wednesday night, left-wing magazine The American Prospect published an interview with Steve Bannon, Mr. Trump's chief strategist, in which the protectionist Mr. Bannon said he was in a "fight every day" about trade with Mr. Trump's top economic adviser, the more free-trade-friendly Gary Cohn, and the treasury department – highlighting the divisions in the White House.

Then on Thursday, the President lashed out at city councils that are removing statues of Confederate generals, tweeting that the "culture" of the country was "being ripped apart," and comparing the leaders of the Confederacy to founding fathers George Washington and Thomas Jefferson.

After a suspected terrorist attack in Barcelona that left at least 13 people dead, Mr. Trump tweeted approvingly about a story, widely believed to be false, that he told frequently on the campaign trail last year, in which he claimed General John Pershing executed Muslims in the Philippines with bullets dipped in pigs' blood.

"Study what General Pershing of the United States did to terrorists when caught. There was no more Radical Islamic Terror for 35 years!" Mr. Trump tweeted.

The outcry is sapping Mr. Trump's political capital, which could be crucial in pushing through major changes to NAFTA. Congress must approve trade deals, and Mr. Trump's shaky control of his caucus is slipping further. Lindsey Graham and Jeff Flake have already taken aim at the President over his Charlottesville comments, and on Thursday, Senator Bob Corker told reporters in Tennessee that Mr. Trump "has not yet been able to demonstrate the stability nor some of the competence that he needs to demonstrate."

And things may only get harder if NAFTA talks drag into Mexico's election campaign next year – or the U.S. midterms.

"Domestic politics may tempt the leaders to use the NAFTA talks to score political points with special interests or to posture as statesmen to distract from thorny problems at home," Mr. Sands said.