NAFTA talks may extend into 2019

The window for a quick NAFTA deal has probably closed and, barring a last-minute surprise, the process is set to stretch into 2019 and a new batch of lawmakers.

Recent high-level talks between the U.S., Canada and Mexico came up short in a bid to reach a deal that could pass Congress this year. Then came Thursday’s tariff announcement and war of words between the countries, particularly U.S. President Donald Trump and Canadian Prime Minister Justin Trudeau.

While NAFTA negotiations will continue, the urgency looks to be gone. The recent phase of highlevel, intense negotiations has now ended and talks will slow, two people familiar with negotiations said, speaking on condition of anonymity.

Trump on Friday repeated his frequent criticism that NAFTA has been a “terrible deal” for the U.S. and said he may favour signing bilateral agreements with Canada and Mexico. “To be honest I wouldn’t mind seeing NAFTA where you’d go by a different name, where you make a separate deal with Canada and a separate deal with Mexico,” Trump told reporters outside the White House. “These are two very different countries.”

The legal window to pass a deal in this Congress is rapidly closing, if not already closed.

Larry Kudlow, director of Trump’s National Economic Council, said Friday that NAFTA is “a story that is going to play out for a while.”

It all suggests any NAFTA deal would be handled by the next U.S. Congress and new Mexican president, pushing the process — talks and ratification — into 2019.

Any NAFTA deal this year “will not be ratified by this U.S. Congress. The procedural and political calendars are now closed,” said Dan Ujczo, a Columbus-based trade lawyer with Dickinson-Wright.

Reaching an agreement this year is also “unlikely,” he said. “There is a realization that President Trump’s NAFTA is more likely to be passed by a new Congress with more Democrats and Trump Republicans than the current Congress.”

U.S. House Speaker Paul Ryan had said that Congress needed notice of intent to sign a deal by May 17, with potentially a couple weeks of wiggle room.

Kudlow said Friday NAFTA “conversations are wide open” and that Trump wants reciprocity.