Top U.S. trade official hints at deal with Mexico
Move seen as push for Canada to compromise
WASHINGTON, D.C. • The U.S. hopes to strike a new trade deal soon with Mexico, compelling Canada to then make compromises it has failed to deliver so far, the top American trade negotiator said Thursday.
Robert Lighthizer appeared to confirm signs that the bogged-down NAFTA negotiations were dividing into separate, bilateral talks, a day after Canada and Mexico pledged to push for a continued, three-way process.
Still, he said he thinks the process can all be wrapped up by the end of next month.
Lighthizer was scheduled to meet later in the day with Mexico’s visiting economy minister to discuss the free trade agreement, Canada being notably absent from the session.
“My hope is that we will before very long have a conclusion with respect to Mexico and that as a result of that, Canada will come in and compromise,” Lighthizer told a hearing of the U.S. Senate’s appropriations committee Thursday. “I don’t believe they have compromised in the same way that the United States has or that Mexico has.”
The U.S. trade representative didn’t elaborate on exactly how he believes Canada has failed to be flexible.
But analysts familiar with the negotiations say Lighthizer thinks the northern neighbour has stalled progress and failed to offer up innovative solutions, while refusing to budge on its support of dairy supply management.
Still, he appeared to indicate Thursday the end result would be a single, updated NAFTA, not two separate accords.
After the hearing, the Republican chair of the subcommittee hosting the session supported the notion of separate negotiating tracks.
“There’s additional pressure that occurs on Canada if Mexico and the U.S. announce ‘We’ve resolved our differences,’ ” said Sen. Jerry Moran.
Meanwhile, Lighthizer also suggested that when a new North American Free Trade Agreement is reached, the 25-per-cent steel and aluminum tariffs imposed on Canada and Mexico — and retaliatory tariffs by both nations — would be ended.
And, despite any holdups, he said he hopes a new NAFTA deal can be reached by late August.
“My sense is that that is not an unreasonable time frame. Everybody wants to get it done,” said Lighthizer.
A spokesman for Foreign Affairs Minister Chrystia Freeland could not immediately be reached for comment.
But both she and Mexican Economy Minister Ildefonso Guajardo said after a meeting in Mexico Wednesday they believed trilateral discussions were still the way to go.
There was some positive news for Canada from the session, as two Republican senators criticized the idea of a five-year sunset clause in NAFTA, a U.S. demand that Canada has rejected out of hand.
Republican Sen. Lamar Alexander said he and many of his colleagues would likely vote against a NAFTA accord that included a sunset clause, saying that “we don’t think it’s worth anything.”
Moran said later he agrees it “should not be included in the final negotiated agreement.”
“It creates even greater uncertainty because our trading relationships are better and stronger if they are long term,” he told reporters.
“Uncertainty is something that no business, no farmer who plants seed in the ground and borrows money to do so … wants.”
Lighthizer was earlier grilled about why a close ally like Canada would be slapped with steel and aluminum tariffs on national-security grounds, and responded with one of the most detailed explanations yet of the controversial move.
The culprit behind world over-supply and depressed prices of steel is China, he acknowledged. But if only it or other individual countries were targeted with tariffs, Canada’s industry would be able take up the slack, and American steel makers wouldn’t benefit, said the official.
As such, it and other allies are a threat to national security and the tariffs need to be applied broadly, he said.
“That’s not to suggest we think army tanks are going to come in from Canada,” added Lighthizer “Nobody is declaring war on Canada, or saying they’re an unfriendly neighbour. They’re obviously not. They’re a great ally.”
His explanation did little for Democrat Sen. Jack Reed, who cited Canada’s combat role in Afghanistan and participation in the NORAD defence system.
“This is a country that has been with us every step of the way,” Reed said.