Trump says U.S., Mexico have a deal
Two-way un-NAFTA leaves Canada out for now, raising questions.
President Donald WASHINGTON — Trump announced Monday that the United States has reached agreement with Mexico on a new trade deal that he declared will not be called NAFTA a name — he said has bad connotations.
“It’s a big day for trade. It’s a big day for our country,” Trump told reporters gathered in the Oval Office to watch him speak by phone with Mexican President Enrique Peña Nieto.
Trump said he would see if Canada could be part of the deal, but that a separate deal with Canada was possible. That would amount to the biggest change yet in U.S. trade policy under the Trump administration if Trump ends the North American Free Trade Agreement and replaces it with a bilateral deal with Mexico.
Trump referred to the possible new deal as the United States-Mexico trade agreement.
Canadian Foreign Minister Chrystia Freeland was to arrive in Washington later Monday or Tuesday morning.
The aim had been to have a “handshake deal” among the three countries for a new free trade agreement by the close of business Friday, an official familiar with the talks said.
A spokesman for Freeland said Canada was “encouraged by the continued optimism shown by our negotiating partners” but made clear that a final agreement would
require careful review and more discussions.
“We will only sign a new NAFTA that is good for Canada and good for the mid- dle class,” the spokesman said. “Canada’s signature is required.”
If Canada doesn’t sign off, it is unclear what Trump might do, as he has said he would try to cancel the entire trade pact.
But if Canada does agree to a new deal, it would allow Trump to officially notify Congress that a deal had been reached.
That would start a 90-day clock under the rules govern-
ing the American president’s trade negotiating authority and allow Peña Nieto to sign the deal before his successor, Andrés Manuel López Obrador, takes office Dec. 1.
López Obrador has been supportive of the negotia- tions but would be likely to seek changes if the treaty is not completed before he assumes the presidency. His concerns about cementing Mexico’s energy privatization in a new NAFTA were among the final sticking points in
the talks. With only five days remain- ing for the United States and Canada to iron out their differences, negotiators real- ize they have exhausted all their wiggle room. “Realistically, it’s certainly tight,” the official said.
Larry Herman, a Toronto trade lawyer and former Canadian trade negotiator, said Canada has “every right” to examine the details of what was agreed to between Mexico and the United States and will then decide how to proceed. “I think it’s appalling
that Canada has been kept at arm’s length from these talks over the past number of weeks,” Herman said.
While Herman said he would expect Canada to resume participation in the talks, “there’s no way a NAFTA agreement can be ready for signature by the
end of this month. It’s not going to happen.”
White House officials had insisted that the new NAFTA deal would have to expire after five years, a sunset demand that both Canada
and Mexico had rejected in recent weeks.
It could not be learned whether Trump administration officials had backed down from this demand or whether it would be part of the final discussions.
Even if Trump cuts a final deal with Mexico and Canada, Congress will likely have to vote to approve any changes.
In an effort to force both Mexico and Canada to agree to a new deal, the U.S. has
placed tariffs on all steel and aluminum imports from their countries.
In recent days, U.S. and Mexican diplomats reached
agreement on key elements of a new treaty, including an increase in the percentage of each car — to 75 percent from the current 62.5 percent — that must be made in North America to qualify for duty-free treatment.
The two sides agreed to a provision that would require a significant portion of each vehicle to be made in highwage factories, a measure aimed at discouraging factory jobs from leaving the United States for Mexico.
Having resolved the major sticking points with Mexico, the Trump administration is now expected to press Canada to accept quickly the consensus terms. But Prime Minister Justin Trudeau, whom Trump criticized after the Group of Seven summit in Quebec in June, does not want to be viewed at home as conceding to the American president.