Canada accepts revised NAFTA at deadline
Canada agreed late Sunday to join the trade deal that the U.S. and Mexico announced last month, and a public announcement was expected before a self-imposed deadline of midnight Sunday designed to allow the current Mexican president to sign the accord on his final day in office, according to two people familiar with the talks.
Diplomats from all three countries engaged in a flurry of telephone consultations over the weekend, reviving hopes of preserving the three-country format of the original North American Free Trade Agreement favored by business groups and congressional Republicans.
The new treaty is expected to be signed by President Donald Trump and his Canadian and Mexican counterparts in 60 days, with Congress likely to act on it next year. Administration officials anticipate a fierce political battle to win congressional approval, especially if Democrats regain control of the House of Representatives in November.
“We will enter October with a trilateral North American trade deal,” said Dan Ujczo, a trade lawyer with Dickinson Wright. “This was the least difficult part. The heavy lift is going to be getting a trade deal through the next Congress in 2019l as well as ratification by Mexico’s new Congress and in Canada during a federal election year.”
Securing a replacement for the nearly 25-year old NAFTA would be a major accomplishment for Trump and his chief trade negotiator, Robert Lighthizer. The president has long been a NAFTA critic.
The New York Times, citing people briefed on the negotiations, said Canada will ease protections on its dairy market and provide access that is similar to what the United States would have gained through the Trans-Pacific Partnership, a trade treaty that Trump withdrew from last year.
The United States is poised to relent on its demands to eliminate an independent tariff dispute-settlement system that Canada has said is a red line in negotiations, according to a person consulted on the negotiations.
The countries also appear to have reached an understanding that would protect Canada from the threat of automobile tariffs, which Trump has routinely threatened, although it is not clear how far those protections would extend.
Canada also appears ready to accept assurances that steel and aluminum tariffs that Trump has imposed will be lifted, although it remains unclear whether the taxes would be replaced by quotas that limit metal imports by the U.S.
Trump administration officials have insisted they needed to release the text of the new deal — with both countries or only Mexico — by midnight Sunday. That would comply with a congressional-notification requirement and allow Mexican President Enrique Peña Nieto to sign the deal before his successor, left-wing populist Andrés Manuel López Obrador, takes office Monday, they said.