Canadian official optimistic on trade
WASHINGTON — Canadian Foreign Affairs Minister Chrystia Freeland said her meeting Tuesday with United States Trade Representative Robert Lighthizer was “a very good, constructive conversation” about how to revamp the North American Free Trade Agreement.
Freeland told reporters after the meeting she and her team plan to work this week in “a full-steam effort” and said both parties will start diving into specific issues Wednesday.
Freeland hurried to Washington a day after the Trump administration reached a preliminary deal Monday with Mexico to replace NFTA.
Freeland is facing a tight deadline to keep the three nations that formed NAFTA 24 years ago together in a trade pact. Lighthizer intends to formally notify Congress of the deal with Mexico on Friday.
Freeland said both parties “are set for an important and constructive week” but also warned that “we are prepared for all scenarios.”
She said significant concessions from Mexico in the areas of labor and rules of origin on cars “really paved the way for what Canada believes will be a good week.”
The Office of the U.S. Trade Representative said 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.
President Trump was quick to proclaim the agreement a triumph, pointing to Monday’s surge in the stock market, which was fueled in part by the apparent breakthrough with Mexico.
Trump suggested that he might leave Canada out of a new agreement. He said he wanted to call the revamped trade pact “the United States-Mexico Trade Agreement” because, in his view, NAFTA has earned a reputation for being harmful to American workers.
But first, he said, he would give Canada a chance to get back in — “if they’d like to negotiate fairly.” To intensify the pressure on Ottawa to agree to his terms, the president threatened to impose new taxes on Canadian auto imports.
Talking to reporters, the top White House economic adviser, Larry Kudlow, urged Canada to “make a great deal like we just made with Mexico. If not, the U.S.A. may have to take action.”
Critics denounced the prospect of cutting Canada out a North American trade pact, in part because of the risks it could pose for companies involved in international trade. Many manufacturers have built vital supply systems that depend on freely crossing all NAFTA borders.