U.S. trade czar wants NAFTA deal in May
WASHINGTON — The United States says it hopes to conclude a NAFTA agreement this month, otherwise negotiations risk being punted off to 2019 and into an uncertain political climate.
U.S. trade czar Robert Lighthizer laid out his preferred timetable Tuesday: he noted that he’s scheduled to head to China this week, then hold NAFTA meetings with his Canadian and Mexican counterparts May 7, and said he wants a deal within a fortnight thereafter.
“I’d like to get it done in a week or two after that. If not, then you start having a problem,” Lighthizer said in a lunchtime discussion at the U.S. Chamber of Commerce in Washington.
“I believe if we don’t get it done in the next week or two then we’re on thin ice about whether it gets done before our (November legislative midterm) election.”
Basic calendar math shows that it will soon be impossible for any NAFTA bill to meet all the procedural requirements for a vote in the U.S. Congress this year. Then, by next year there will be new members of Congress, and perhaps even a new party in charge, with polls showing a tight race for the U.S. House of Representatives.
Lighthizer said a changed legislature could send negotiators back to the table: “The new Congress will have its own priorities . ... There’s just a sense they’ll try to open it up again. I may be wrong.”
Each of the three countries has its reasons for wanting a deal quickly.
The U.S. administration not only fears losing control of Congress to the Democrats, but is also juggling multiple trade files at once and some officials would like to put NAFTA to rest.
Mexico’s government wants to lock in a deal before its July election, with polls showing an antiestablishment, previously-NAFTA-skeptical candidate trouncing the governing party.
In Canada, lingering trade uncertainty is hurting business confidence. The latest Bank of Canada report suggests NAFTA and other trade-related concerns will reduce business investment by about two per cent this year, roughly equivalent to 0.2 per cent of GDP. But one trade insider says there will be no deal unless the U.S. downsizes its priorities. Eric Miller notes that the countries have spent months haggling over the minutiae of auto-parts rules of origin, and the idea that they could begin tackling dairy, pharmaceuticals, intellectual property, procurement and dispute resolution, and complete it all within days, is a fantasy.
Just last week, the countries were still arguing about the basic architecture of the agreement — sources say things got heated, as the U.S. kept pushing for a socalled sunset clause that would terminate NAFTA after five years unless all countries explicitly renew it.
“The U.S. government does not seem to have a vision of the endgame it would like to pursue,” said Miller, of the Washingtonbased Rideau Potomac Strategy Group. “One cannot have (a) comprehensive and quick (agreement) at the same time. And until the U.S. reconciles itself to choosing one pathway or the other, we’re going to be stuck circling the airport rather than coming in to land.”