No trade deal yet for U.S., Canada
Breakdown in talks slows NAFTA reorg
WASHINGTON — Highstakes trade negotiations between the White House and Canadian leaders unraveled Friday amid strains caused by lingering divisions and comments President Donald Trump made that suggested he would refuse to offer concessions.
The breakdown put Trump’s effort to redraw the North American Free Trade Agreement in legal limbo.
The White House formally notified Congress on Friday that it will enter into a trade agreement with Mexico.
The letter stipulated that Canada could also be added “if it is willing.”
But it is unclear whether a three-nation trade pact can be replaced under congressional rules with a two-nation agreement. White House officials vowed to continue discussions with Canada, and talks are expected to pick back up Wednesday.
“The talks were construc-
tive, and we made progress,” U.S. Trade Representative Robert Lighthizer said in a statement.
But Trump seemed willing to leave Canada out of a final deal. “If we don’t make a deal on Canada, that’s fine,” Trump said Friday at an event in Charlotte, N.C.
Sending the letter to Congress on Friday begins a formal 90-day process for reworking the trade deal, a deadline the White House believes is necessary in order to get approval from the outgoing government in Mexico.
The White House’s letter to Congress caps a chaotic day of posturing and brinkmanship between the U.S. and one of its closest allies.
U.S. and Canada appeared to be within striking distance of a deal Thursday, but a number of issues remained unsettled.
They couldn’t agree, for example, on U.S. demands over dairy policy, and they also hadn’t reached agreement about patent protection for pharmaceuticals or how to resolve disputes going forward.
Canadian officials felt that the U.S. team wasn’t willing to budge, a sentiment that appeared to be validated Friday morning after the Toronto Star published off-the-record comments Trump had made one day earlier to Bloomberg News. Trump told Bloomberg journalists that negotiations to rework NAFTA would only be done on his terms, suggesting he would not offer any concessions to Canada.
Trump later confirmed making the comments to Bloomberg, though he complained they were not intended for publication.
“Wow, I made OFF THE RECORD COMMENTS to Bloomberg concerning Canada, and this powerful understanding was BLATANTLY VIOLATED,” Trump wrote on Twitter. “Oh well, just more dishonest reporting. I am used to it. At least Canada knows where I stand!”
The Star quoted Trump as saying he was not going to offer Canada any concessions. But, Trump said, he couldn’t admit this publicly because “it’s going to be so insulting they’re not going to be able to make a deal.”
Canadian Foreign Minister Chrystia Freeland, who was in Washington meeting with White House officials when the news of the comments broke, would not comment on Trump’s role in the negotiations.
The White House wanted a firm commitment from Canada to rework NAFTA by Friday. Freeland said Canadians would not be pushed into a deal that’s not in their interest, asserting the White House needed to soften some of its demands.
“At the end of the day, we are only going to sign a deal that’s good for Canada,” she said.
It couldn’t immediately be learned whether the setbacks would prove temporary or could threaten Trump’s ultimate goal of reworking NAFTA, a core promise of his 2016 presidential campaign.
Canadian officials had previously expressed frustration that they believed the White House wasn’t willing to budge on a range of demands, including dairy policy, dispute resolution and the patent protections for pharmaceuticals. Trump’s off-the-record comments may have validated their fears, as it suggested Trump was stringing the Canadians along.
Such comments could make it harder for Canadian Prime Minister Justin Trudeau to cut a deal with Trump, as Canadians back home could question the deal’s value.
Making matters worse, Trump has tried for months to pressure Trudeau into a series of trade concessions, imposing tariffs on Canadian steel and aluminum imports and vowing to enact similar penalties on automobiles and auto parts.
The White House has set its own deadline of Friday for the completion of negotiations on a preliminary deal with Canada, part of Trump’s goal to get a new pact signed before Mexican President Enrique Peña Nieto leaves office Dec. 1.
Trump has said he will forge ahead without Canada if necessary and complete a new trade agreement with Mexico, a preliminary version of which Trump announced on Monday. But Republican lawmakers in Congress have said they would oppose any changes unless Canada is involved.
Canada could be added later into a preliminary U.S.-Mexico deal, but that would involve legal complications and add fresh scrutiny from Congress.