Time is ‘running out’ on trade deal
Countries separated by ‘very large issues’ as deadline approaches
WASHINGTON— U.S. President Donald Trump’s administration will continue trade negotiations with Canada even if there is no deal by the U.S.-imposed deadline of this weekend, Trump’s top trade official said Tuesday.
In a largely pessimistic public appearance, U.S. Trade Representative Robert Lighthizer said Canada is “running out of time” to sign on to a trade deal with the U.S. and Mexico.
For the first time, however, Lighthizer said that the administration will not abandon the talks with Canada even if Canada does not immediately join the U.S.-Mexico deal he says he plans to submit to Congress at the end of September.
Trump himself has suggested that he might simply abandon talks with Canada if Canada did not join the agreement with Mexico. Lighthizer said that is not the case.
“Hopefully, we’ll end up with something with Canada. If not, we’ll have to do it in a separate deal, as soon afterward as we can,” he told an official from the U.S. Chamber of Commerce at an event in New York City.
“We’re certainly not going to give up. They’re a huge trading partner of the United States, but we’re going to have a highstandard deal.”
At a separate point in the interview, Lighthizer said, “We’re going to go ahead with Mexico. If Canada comes along now, that would be the best. If Canada comes along later, then that’s what’ll happen. We certainly want to have an agreement with Canada.”
Trump has threatened to impose tariffs on Canadian cars if Canada does not come to an agreement with the U.S. Light- hizer said he doesn’t know where Trump’s thinking stands on auto tariffs.
Lighthizer’s remarks suggest “Canada has bought itself a few more weeks,” said Dan Ujczo, an Ohio-based trade lawyer with Dickinson Wright.
“Lighthizer knows that if this is presented as a Mexico-only deal and Canada is out for good, then Congress and the private sector will disapprove and take action,” Ujczo said.
Leaving the door open for Canada, he said, would “soften the opposition in Congress.”
Lighthizer’s comments on the state of the North American Free Trade Agreement negotiations were similar to those offered on condition of anonym- ity by Canadian and U.S. officials.
The Washington Post, citing U.S. officials, reported on Tuesday that the two countries were “virtually certain” to miss the deadline.
Lighthizer said there are “very large issues” and “a fair amount of distance” standing between them.
He identified two: the Chapter 19 system for resolving trade disputes, which Trump wants to eliminate and Trudeau wants to keep, and Canada’s protectionist dairy system, which Trump wants to open up and Trudeau has vowed to largely preserve.
“The fact is Canada’s not making concessions in areas where we think they’re essential,” Lighthizer said.
Lighthizer suggested that the U.S. steel and aluminum tariffs on Canada would remain in place for a while. He said he initially wanted the tariff battle to be resolved as part of the NAFTA talks, but “our view is now we’ll turn to that as a next stage.”
There is considerable uncertainty over how the process of securing congressional approval might unfold.
It is still unclear if Congress would be willing to proceed in any way with a U.S.-Mexico agreement that does not include Canada, let alone give such an agreement final approval.
It is also unclear if Congress believes the Trump administration even has the legal authority to exclude Canada.
And it is unclear whether Congress would allow Canada to be added in to a U.S.-Mexico agreement at a later date rather than requiring the administration to make two separate deals. The Canadian government and independent trade experts believe Congress might well show flexibility, since members strongly prefer a three-country agreement.