Mex­ico, U.S. ready to deal on NAFTA

Trudeau in­sists feds would rather not sign on if it’s a bad one for the coun­try


Mex­ico’s chief NAFTA ne­go­tia­tor headed to Wash­ing­ton as the na­tion re­it­er­ated that it’s pre­pared to pur­sue a new bi­lat­eral trade deal with the U.S. even if it ends up leav­ing out Canada.

Ken­neth Smith Ramos and his team plan to work on word­ing of the U.S.-Mex­ico trade agree­ment that Pres­i­dent Don­ald Trump in­tends to sign by the end of Novem­ber. His visit is the first by a high­level Mex­i­can ne­go­tia­tor since the two na­tions an­nounced a frame­work deal at the end of Au­gust. Mean­while, Canadian of­fi­cials are hud­dled with Prime Min­is­ter Justin Trudeau in Saskatchewan, re­lay­ing the lat­est state of play two weeks af­ter the na­tion re­joined talks to stay in the pact.

Mex­ico con­tin­ues to hope for a re­vamped North Amer­i­can Free Trade Agree­ment that in­cludes Canada, but it’s also plan­ning for the pos­si­bil­ity that Canada won’t re­main in the trad­ing bloc, Mex­i­can Econ­omy Min­is­ter Ilde­fonso Gua­jardo told re­porters in Mex­ico City on Wed­nes­day.

Gua­jardo said that while U.S. rules dic­tate the Trump ad­min­is­tra­tion must re­lease the text of the agree­ment by Sept. 30, from a prac­ti­cal per­spec­tive the na­tions need 10 days to two weeks be­fore that dead­line to pre­pare their pre­sen­ta­tions of the deal.

For­eign Min­is­ter Chrys­tia Free­land is lead­ing the push to ham­mer out dif­fer­ences for a deal. Trudeau at a cau­cus re­treat in Saska­toon on Wed­nes­day re­peated that no deal on a new NAFTA is bet­ter than a bad one for Canada.

Trudeau in tele­vised re­marks said that Canada “won’t sign an agree­ment that isn’t to our ad­van­tage. It would be bet­ter not to sign any agree­ment in such a case.”

The U.S. and Canada re­main at odds over a hand­ful of core is­sues. They in­clude anti-dump­ing dis­pute pan­els con­tained un­der Chap­ter 19 of the cur­rent deal, which the U.S. wants to re­move and Canada wants to keep, and Canada’s pro­tected dairy sec­tor, which isn’t in the cur­rent deal but where the U.S. wants greater mar­ket ac­cess. An­other point of con­tention is cul­tural in­dus­tries, where Canada is seek­ing to pre­serve an ex­emp­tion. In­tel­lec­tual prop­erty and phar­ma­ceu­ti­cal patents are among other is­sues.

“NAFTA is tri­lat­eral deal, and that fact is a great as­set,” Gua­jardo said. “If in the end we see a sce­nario that we don’t ex­pect nor hope for but can’t be ruled out — that there’s no agree­ment be­tween Canada and the U.S. — then Mex­ico needs to take the next step, ad­vanc­ing on a bi­lat­eral deal, if it’s nec­es­sary. But I re­peat, we’re bet­ting that the tri­lat­eral na­ture is main­tained.”

Smith Ramos and his team will seek to meet with both U.S. and Canadian ne­go­tia­tors dur­ing the Wash­ing­ton trip, ac­cord­ing to a per­son fa­mil­iar with the plans, who asked not to be named dis­cussing pri­vate con­ver­sa­tions.

Trump has threat­ened to hit Canada with auto tar­iffs if a deal can’t be reached to re­vamp NAFTA. On Tues­day, Trump struck an up­beat tone, telling re­porters that the deal-mak­ing with Canada “is com­ing along very well and we’ve all been deal­ing in good faith.”

Prom­i­nent mem­bers of Congress have warned the Trump ad­min­is­tra­tion that it can’t pro­ceed un­der its cur­rent fast-track path with­out a tri­lat­eral deal, but the Trump ad­min­is­tra­tion has ar­gued that it can.

Free­land plans to re­turn to Wash­ing­ton for more talks on NAFTA on Thurs­day.

“I ex­pect we’ll prob­a­bly have sev­eral more ses­sions. This won’t get re­solved in an af­ter­noon,” said a Canadian source, who de­clined to be iden­ti­fied given the sen­si­tiv­ity of the sit­u­a­tion. “We don’t feel there’s any tremen­dous pres­sure to get it done in the im­me­di­ate short term,” the source added.

Free­land plans to fly to Wash­ing­ton late Wed­nes­day, the source said. She is most likely to hold a sin­gle day of talks with U.S. Trade Rep­re­sen­ta­tive Robert Lighthizer on Thurs­day be­fore re­turn­ing to Wash­ing­ton next week.

“We’ll see if the Amer­i­cans are ready to come to the ta­ble to do a deal. The tone is more con­struc­tive, the tone has been dif­fer­ent,” said the source. “The most op­ti­mistic sce­nario would be to get a deal in prin­ci­ple next week.”


A worker pol­ishes a Fiat 500 ve­hi­cle at Fiat Chrysler’s assem­bly plant in Toluca, Mex­ico. The threat of auto tar­iffs hangs over Canada as it re­mains at odds with the U.S. over some core NAFTA is­sues and Mex­ico pre­pares for the pos­si­bil­ity of a bi­lat­eral pact.


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