Trump, Mexico reach trade deal
But tentative NAFTA reboot snubs Canada
WASHINGTON — The Trump administration and Mexico have reached a preliminary accord to replace the North American Free Trade Agreement with a new deal that would be intended to encourage more manufacturing in the United States.
At the same time, President Trump threatened to keep Canada, the third member of NAFTA, out of any new trade agreement. In announcing the tentative accord yesterday at the White House, Trump said a new pact would be called “the United States-Mexico Trade Agreement.”
Trump said he was open to including Canada — “if they’d like to negotiate fairly.” He threatened to impose new taxes on Canadian auto imports to intensify pressure on Ottawa to agree to a deal to Trump’s liking.
Canada’s NAFTA negotiator, Foreign Minister Chrystia Freeland, is cutting short a trip to Europe to fly to Washington today to try to restart talks.
“We will only sign a new NAFTA that is good for Canada and good for the middle class,” said Adam Austen, a spokesman for Freeland, adding that “Canada’s signature is required.”
Trump has condemned the 24-year-old NAFTA trade pact as a job-killing “disaster” for American workers. The preliminary agreement announced yesterday would have be ratified by lawmakers in each country. But initially, it looks like a public-relations victory for Trump.
Over the weekend, U.S. and Mexican negotiators worked to narrow their differences, capping talks that had begun a year ago and have proved highly contentious.
The Office of the U.S. Trade Representative said yesterday that Mexico had agreed to ensure that 75 percent of automotive content be produced within the trade bloc, up from a current 62.5 percent, to receive duty-free benefits and that 40 percent to 45 percent be made by workers earning at least $16 an hour. Those changes are meant to encourage more auto production in the United States.
For months, the talks were held up by the Trump administration’s insistence on a “sunset clause”: A renegotiated NAFTA would end after five years unless all three countries agreed to continue it. Mexico and Canada considered that proposal a deal-killer.
Yesterday, the Trump administration and Mexico announced a compromise on that divisive issue: An overhauled NAFTA would remain in force for 16 years. After six years, the countries would decide to update it or change it, and could let it expire.