Trump claims vin­di­ca­tion as Canada joins NAFTA re­place­ment

The Washington Times Weekly - - Politics - BY S.A. MILLER

Pres­i­dent Trump checked off a ma­jor cam­paign prom­ise that seemed im­pos­si­ble when he made it: rewrit­ing the 24-year-old North Amer­i­can Free Trade Agree­ment with Canada and Mex­ico.

A week­end of hard bar­gain­ing got Canada at the last mo­ment to join a U.S.Mex­i­can deal, re­tain­ing a three-way agree­ment to gov­ern the $1.2 tril­lion in an­nual trade among the coun­tries.

The deal aims to re­vive U.S. man­u­fac­tur­ing jobs, open mar­kets to Amer­i­can agri­cul­ture and add re­stric­tions to Mex­i­can and Cana­dian prod­ucts en­ter­ing the U.S. Mr. Trump ob­tained long-sought con­ces­sions from Ot­tawa to open its re­stric­tive dairy mar­kets and re­frain from cur­rency ma­nip­u­la­tion. Canada was able to pro­tect an in­de­pen­dent panel to ad­ju­di­cate trade dis­putes that the U.S. wanted to elim­i­nate.

Sup­port­ers of Mr. Trump say his hard line and will­ing­ness to use tar­iffs and other mea­sures se­cured a deal far more fa­vor­able to U.S. man­u­fac­tur­ers and farm­ers. Skep­tics say the deal amounted to a re­brand­ing of NAFTA that will have an un­cer­tain im­pact on large Mex­i­can trade sur­pluses that have in­fu­ri­ated the pres­i­dent.

Mr. Trump har­bored no such doubts. He held a cel­e­bra­tory brief­ing along­side U.S. Trade Rep­re­sen­ta­tive Robert E. Lighthizer and top ad­viser and son-in-law Jared Kush­ner to mark the death of a trade agree­ment he has long de­tested.

“I have long con­tended that NAFTA was per­haps the worst trade deal ever made,” Mr. Trump said at a Rose Gar­den press con­fer­ence to an­nounce an agree­ment that he de­scribed as noth­ing less than his­toric.

He later added, “We have ne­go­ti­ated this new agree­ment based on the prin­ci­ple of fair­ness and rec­i­proc­ity. To me, it’s the most im­por­tant word in trade be­cause we’ve been treated so un­fairly by so many na­tions all over the world that we’re chang­ing that.”

Cana­dian Prime Min­is­ter Justin Trudeau, who clashed with Mr. Trump as the talks dragged on, praised the fi­nal agree­ment as “pro­foundly ben­e­fi­cial” for Cana­dian fam­i­lies and the mid­dle class — even though Canada’s dairy farm­ers is­sued a state­ment con­demn­ing the deal.

“We never be­lieved it would be easy, and it wasn’t,” Mr. Trudeau told re­porters in Ot­tawa. “But to­day is a good day for Canada.”

Mex­i­can Pres­i­dent En­rique Pena Ni­eto, who leaves of­fice in De­cem­ber, said via Twit­ter that the deal ne­go­ti­ated over the past 13 months “achieves what we pro­posed at the be­gin­ning: a win-win-win agree­ment.”

Pro­vi­sions in the ac­cord — in­clud­ing stop­ping for­eign coun­tries from as­sem­bling cars in Mex­ico and ship­ping them tax-free into the U.S. — would sup­port “hun­dreds of thou­sands Amer­i­can jobs,” Mr. Trump said.

To mark the de­fin­i­tive end of NAFTA, Mr. Trump and his aides were call­ing the agree­ment the U.S.-Mex­ico-Canada Agree­ment, or USMCA.

Mr. Lighthizer said com­plet­ing the deal in 14 months was a his­toric feat.

“In trade ne­go­ti­at­ing terms, that’s like warp speed,” he said.

Wall Street ral­lied on the news of the deal, driv­ing the Dow Jones in­dus­trial av­er­age up 192 points, or 0.73 per­cent, to close at 26,551.

It is the lat­est in a series of Mr. Trump’s ag­gres­sive “Amer­ica First” trade moves.

The ad­min­is­tra­tion scrapped the 12-coun­try Trans-Pa­cific Part­ner­ship, rewrote the free trade ac­cord with South Korea and forced Ja­pan and the Eu­ro­pean Union to en­ter into talks on bi­lat­eral deals. The USMCA also could pro­vide a boost for Mr. Trump’s es­ca­lat­ing trade war with China, Amer­ica’s largest trad­ing part­ner, over Bei­jing’s un­fair prac­tices and theft of in­tel­lec­tual prop­erty.


Mr. Trump saw the deal as vin­di­ca­tion of his use of tar­iffs as lever­age in trade ne­go­ti­a­tions.

“With­out tar­iffs we wouldn’t be talk­ing about a deal. Just for those ba­bies out there that keep talk­ing about tar­iffs. That in­cludes Congress, ‘Oh please, don’t charge tar­iffs,’” he said, us­ing whin­ing tones to mock crit­ics, in­clud­ing many Repub­li­can law­mak­ers who warn that tar­iffs cause higher prices and lost jobs.

Agree­ments to pro­tect U.S. au­tomak­ers and au­towork­ers were key el­e­ments of the deal. The USMCA also adds pro­tec­tions for la­bor rights and the en­vi­ron­ment — el­e­ments long sought by lib­eral and la­bor groups, and for the first time sets rules for in­ter­net com­merce that were barely con­tem­plated when NAFTA was rat­i­fied in 1994.

The deal was ap­plauded by trade as­so­ci­a­tions for farm­ers and man­u­fac­tur­ers, who ex­pressed re­lief that it was a three-way agree­ment.

Mr. Trump com­mended Mr. Pena Ni­eto and Mr. Trudeau for reach­ing an ac­cord that ben­e­fited all three coun­tries.

Mr. Trump said the fric­tion with Mr. Trudeau did not af­fect the ne­go­ti­a­tions be­cause they were both “pro­fes­sion­als” look­ing out for the peo­ple who elected them. The three lead­ers are ex­pected to sign the agree­ment in late Novem­ber at the Group of 20 sum­mit in Buenos Aires.

The deal will then go to Congress, where it will not likely get a vote un­til next year af­ter a new and po­ten­tially Demo­crat-run Congress is sworn in. Mr. Trump ac­knowl­edged that pas­sage of the tri­lat­eral trade deal is not guar­an­teed on Capi­tol Hill.

“Any­thing you sub­mit to Congress is trou­ble, no mat­ter what,” Mr. Trump said, pre­dict­ing that the Demo­cratic re­ac­tion would be: “Trump likes it, so we’re not go­ing to ap­prove it.”

But with many lib­eral Democrats and la­bor unions long crit­i­cal of NAFTA, Mr. Trump’s re­vi­sions could face a friendly re­cep­tion.

“As some­one who voted against NAFTA and op­posed it for many years, I knew it needed fix­ing. The pres­i­dent de­serves praise for tak­ing large steps to im­prove it,” Se­nate Mi­nor­ity Leader Charles E. Schumer, New York Demo­crat, said in a state­ment. Any fi­nal agree­ment “must be judged on how it ben­e­fits and pro­tects mid­dle-class fam­i­lies and the work­ing peo­ple in our coun­try,” Mr. Schumer said.

The path to fi­nal ap­proval will be eas­ier in Canada and Mex­ico. The Trump ad­min­is­tra­tion reached an agree­ment with Mex­ico in Au­gust to re­place NAFTA.

Mr. Trump then threat­ened to slap tar­iffs on au­tos from Canada if Ot­tawa didn’t get on board. He gave Ot­tawa an Oct. 1 dead­line to join the deal be­fore the U.S.-Mex­ico deal was sub­mit­ted to Congress. The ne­go­ti­a­tions went down to the wire, when both sides made con­ces­sions.

The com­pro­mise in­cluded Canada open­ing its mar­ket to Amer­i­can dairy prod­ucts that had been sub­ject to tar­iffs as high as 270 per­cent.

The Trump ad­min­is­tra­tion backed off de­mands for the elim­i­na­tion of NAFTA’s so-called Chap­ter 19 dis­pute res­o­lu­tion boards for is­sues such as anti-dump­ing and coun­ter­vail­ing tar­iffs. Canada wanted Chap­ter 19 to chal­lenge U.S. tar­iffs on steel and alu­minum.

The tar­iffs on steel and alu­minum, a huge ir­ri­tant for steel-pro­ducer Canada, were not ad­dressed in the USMCA but will be taken up in later ne­go­ti­a­tions, U.S. of­fi­cials said.

The fast pace of ne­go­ti­a­tions was tied to Mex­ico’s po­lit­i­cal cal­en­dar.

Mr. Trump wanted the deal singed be­fore Mr. Pena Ni­eto leaves of­fice Dec. 1. He will be re­placed by Mex­i­can Pres­i­dent-elect An­dres Manuel Lopez Obrador, who has voiced sup­port for the deal but could change his po­si­tion once in of­fice.

David R. Sands con­trib­uted to this re­port.


Pres­i­dent Trump held a press con­fer­ence to an­nounce the new trade agree­ment for the U.S., Mex­ico and Canada. “I have long con­tended that NAFTA was per­haps the worst trade deal ever made,” he said.

Cana­dian Prime Min­is­ter Justin Trudeau said the United States-Mex­ico-Canada Agree­ment will be “pro­foundly ben­e­fi­cial” to fam­i­lies and the mid­dle class.

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