U.S. admits it’s all take, no give with NAFTA
Commerce Secretary says demands on Canada, Mexico ‘a tough sell’ in negotiations
WASHINGTON— The Trump administration is demanding NAFTA concessions from Canada and Mexico but not offering “anything” in exchange, U.S. Commerce Secretary Wilbur Ross said on Wednesday.
Ross’s remarkable public statement corroborates the complaints of Canadian and Mexican officials, who have accused the U.S. of taking an unusually and unreasonably hard line in the talks to renegotiate the North American free-trade pact.
U.S. Vice-President Mike Pence said in August that the negotiation would be a “win-win-win” for all three countries, and Canadian Foreign Affairs Minister Chrystia Freeland has repeated that this is what Canada is seeking. Ross, however, suggested the U.S. was pushing for something different.
“We’re trying to do a difficult thing. We’re asking two countries to give up some privileges that they have enjoyed for 22 years. And we’re not in a position to offer anything in return,” he said on CNBC. “So that’s a tough sell. And I don’t know that we’ll get every single thing we want. The question is, will we get enough to make it worthwhile?”
Freeland has criticized the U.S. this month, including in a CNN appearance on Sunday, for taking a “winner-take-all” approach to the talks. Her office repeated those words in response to Ross.
“Our government remains focused on achieving a win-win-win in these negotiations, a winner-take-all attitude won’t work,” Freeland spokesperson Adam Austen said in an email.
It is possible that Ross is bluffing or simply speaking for domestic political consumption. Trade experts, though, said his words accurately describe what is happening behind the scenes.
“They are not really negotiating. They’re saying, ‘Here’s our position, take it or leave it. And if you don’t like it, we’ll withdraw from the NAFTA,’ ” said Canadian trade lawyer Lawrence Herman, who predicted the negotiations would soon collapse because of the U.S. stance.
“It’s an outrageously aggressive and uncompromising position that the U.S. is taking in the negotiations. And it doesn’t augur well for a successful outcome,” Herman said.
U.S President Donald Trump used similar language to Ross in his own interview on Wednesday, saying on Fox Business Network that Canada and Mexico are having a hard time understanding that things would have to get worse for them.
“In order to have a resolution — because right now, Mexico and Canada have such a great deal — it’s so good that it’s very hard for them to get used to the fact that it can’t be that way anymore,” Trump told host Lou Dobbs.
As he has in the past, Trump said he thinks the only way to secure a good deal for the U.S. is to put pressure on the other two countries by initiating a termination. He said his negotiators “are going to have to get tougher.”
“I say, right now, it’s going to be very hard. And in my opinion, in order to make a fair deal with NAFTA, you have to terminate the deal and you have to see where you’re going to come,” Trump told Dobbs.
Trump said the same thing in a private meeting with Republican senators on Tuesday, the publication Inside U.S. Trade reported.
“The president said there was no way to get the changes we need unless we get out, then have six months to negotiate,” said an anonymous pro-NAFTA senator. When senators expressed concerns, Inside U.S. Trade reported, Trump said, “Trust me, we’re working on this.”
Initiating a termination would carry risks of its own: Mexico has promised to walk away from the negotiating table if Trump announces he is starting the six-month notice period.
Canada has not taken a public position on what it would do in that case. Freeland, speaking more generally, said earlier this month that Canada would like to stay at the table.
Inside U.S. Trade reported that some Republican senators are concerned that even initiating the termination process could damage the economy. Kansas Sen. Pat Roberts expressed fear over the possible impact of the uncertainty on the agricultural industry.
“That may be an option that the president feels he should exercise in order to get Mexico to the table to achieve what he wants to achieve, which is the trade imbalance — I understand that — but I think we can do it in different ways without sending shock waves all throughout agriculture. And then to restitch that and put it all back together it’s like Humpty Dumpty. You push Mr. Humpty Dumpty trade off the wall and it’s very hard to put him back together,” Roberts told Inside U.S. Trade.
It is not clear whether Trump could actually terminate the deal on his own or whether he would require congressional approval.
The U.S. Chamber of Commerce, a business group that usually favours Republicans, has ramped up its pro-NAFTA lobbying this week, swamping Capitol Hill with industry representatives to plead for the preservation of the deal. And the major automotive companies have launched a pro-NAFTA pressure campaign of their own. The slogan for their “Driving American Jobs” effort, “We’re winning with NAFTA,” is a nod to Trump’s campaign promise to get America to “win again.”
“We need you to tell your elected officials that you don’t change the game in the middle of a comeback. We’re winning with NAFTA,” they said on their website.
The fifth round of negotiations is set for Mexico City next month.