‘MY HOPE is that we will before long have a CONCLUSION with respect to Mexico and that as a result CANADA will come in and BEGIN to compromise’
TOP U.S. TRADE NEGOTIATOR SENDS MESSAGE TO OTTAWA
The U.S. is optimistic it can strike a new trade deal with Mexico soon, and hopes that will compel Canada to make the compromises it has so far avoided, America’s top trade negotiator said Thursday.
Robert Lighthizer appeared to confirm indications that the bogged-down NAFTA negotiations were dividing into separate, bilateral talks, a day after Canada and Mexico pledged to push for a continued, three-way process.
Still, he said he thinks an overall accord can be wrapped up by the end of next month.
Lighthizer was scheduled to meet later in the day with Mexico’s visiting economy minister to discuss the free-trade agreement, Canada being notably absent from the session.
“My hope is that we will before very long have a conclusion with respect to Mexico and that as a result of that, Canada will come in and compromise,” Lighthizer told a hearing of the U.S. Senate’s appropriations committee Thursday. “I don’t believe they have compromised in the same way that the United States has or that Mexico has.”
The U.S. Trade Representative didn’t elaborate on exactly how he believes Canada has failed to be flexible.
But analysts familiar with the negotiations say Lighthizer thinks the northern neighbour has stalled progress and failed to offer up innovative solutions, while refusing to budge on its support of dairy supply management.
Still, he appeared to indicate Thursday the end result would be a single, updated NAFTA, not two separate accords.
After the hearing, the Republican chair of the subcommittee hosting the session supported the notion of separate negotiating tracks.
“There’s additional pressure that occurs on Canada if Mexico and the U.S. announce ‘We’ve resolved our differences,’ ” said Sen. Jerry Moran.
Meanwhile, Lighthizer also suggested that when a new NAFTA is reached, the 25-per-cent steel and aluminum tariffs imposed on Canada and Mexico — and retaliatory tariffs by both nations — would be ended.
He said he hopes a new NAFTA deal can be reached by late August. That would be the latest possible date an agreement could be approved by Congress before current Mexican President Enrique Pena Nieto leaves office on Dec. 1, he said. American law requires the administration to give congress 90 days’ notice of a new trade deal.
Incoming Mexican president Andrés Manuel López Obrador has pledged to honour any accord signed by his predecessor, and doing a deal during the transition is seen as giving him political protection if the agreement is later criticized in Mexico.
“If we’re going to have (Nieto) sign it, with the consent of the newly elected president, and the president of the United States and hopefully the Canadians, you’re probably looking at some kind of conclusion during the course of August,” said Lighthizer.
A spokesman for Foreign Affairs Minister Chrystia Freeland could not immediately be reached for comment. But both she and Mexican Economy Minister Ildefonso Guajardo said in Mexico Wednesday that they believed trilateral discussions were still the way to go.
There was some positive news for Canada from the session, as two Republican senators criticized the idea of a five-year sunset clause in NAFTA, a U.S. demand that Canada has rejected.
Republican Sen. Lamar Alexander said he and many of his colleagues would likely vote against a NAFTA accord that included a sunset clause, saying that “we don’t think it’s worth anything.”
Moran said later he agrees it “should not be included in the final negotiated agreement.”
“It creates even greater uncertainty because our trading relationships are better and stronger if they are long term,” he told reporters. “Uncertainty is something that no business, no farmer who plants seed in the ground and borrows money to do so … wants.”
Lighthizer was earlier grilled on why a close ally like Canada would be slapped with steel and aluminum tariffs on national security grounds.
The culprit behind world over-supply and depressed prices of steel is China, he acknowledged. But if only it or other individual countries were targeted with tariffs, Canada’s industry would be able take up the slack, and U.S. steel makers wouldn’t benefit, he said.
His explanation did little for Democrat Sen. Jack Reed, who cited Canada’s combat role in Afghanistan and participation in NORAD.
“This is a country that has been with us every step of the way,” Reed said.