SENATE REPUBLICANS WANT CANADA ON BOARD.
Would force compromise with Trudeau
WASHINGTON• Senate Republicans are insisting on Canada’s participation in a North American free-trade deal, a demand that would force President Donald Trump to reach a compromise with Prime Minister Justin Trudeau if he is to secure a major trade victory.
As of early Tuesday afternoon, as Foreign Minister Chrystia Freeland was arriving in Washington, Canadian officials still hadn’t seen the official text of the deal they have been asked to accept, according to one official close to the negotiations who spoke on the condition of anonymity to discuss confidential deliberations.
Trump said Monday that if Canada refuses to sign on to the new deal, he will terminate the NAFTA agreement.
But many U.S. lawmakers say Trump’s approach is neither wise nor legal, potentially creating fresh hurdles. Congress must sign off on any trade deal before it can take effect.
Most GOP senators strongly support NAFTA, saying it has brought jobs to their states. Although they have reluctantly gone along with the Trump administration’s attempts to renegotiate the three-party deal, the idea of leaving Canada out was met with near universal condemnation Tuesday.
“Obviously Canada’s got to be willing to reach an agreement but it would be really short-sighted for us to have an agreement only with Mexico,” said Sen. Jerry Moran, a Kansas Republican.
Several lawmakers argued that a bilateral U.S.-Mexico deal could not even be brought before Congress because the fast-track rules governing the NAFTA renegotiations pertained specifically to a three-party deal.
Texas Sen. John Cornyn, the No. 2 Senate Republican, told reporters Tuesday that there would be “technical problems” with Congress voting on a bilateral MexicoU.S. trade deal under fasttrack procedures that were expected to apply to a trilateral NAFTA renegotiation.
Republican Sen. Patrick Toomey, from Pennsylvania, whose views often reflect those of many of the free-trade Republicans in Congress, expressed similar views about Senate passage of a deal excluding Canada. “NAFTA was enacted with legislation . ... Similarly a change to NAFTA requires legislation,” he said.
There was also skepticism generally about the Trump administration’s announcement of a deal with Mexico, given the scant details available and GOP lawmakers’ wariness about the president’s impulsive and scattershot approach on trade — the issue that, more than any other, has divided him from his allies on Capitol Hill.
“None of us even know really what deal it is they’ve agreed to,” said Sen. Bob Corker, a Tennessee Republican and a Trump critic. “It seems like this is more for optics and people feeling good about the future as it relates to the mid-terms than it is reality, but I could be wrong.”
With the fine print unavailable, Mexican trade experts and business executives remained uncertain about how the Mexico-U.S. deal might impact the economy. They questioned what would happen to steel and aluminum tariffs that Trump imposed on Mexico. And how Mexico’s car industry, a key sector driving the country’s economic growth in recent years, would incorporate the new requirements about using North American parts and paying higher wages.
“There are many questions, and we don’t have many answers,” said Jonathan Heath, an economist in Mexico City. “We still have to see who has conceded what, and I’m a little scared to find out.”
After top advisers talked optimistically about reaching a deal with Canada, the White House’s mixed messaging continued Tuesday.
Commerce Secretary Wilbur Ross suggested the administration would take a harder line, seemingly echoing Trump’s statement that “we’ll see” if Canada can join the deal later.
“This deal is pretty well put together with Mexico,” Ross told Fox Business Network on Tuesday. “So the president, as he’s indicated, is fully prepared to go ahead with or without Canada. We hope that Canada will come in. I think it’s a good idea if they do. There’s really not much they should object to. But if not, they will then have to be treated as a real outsider.”
SHORT-SIGHTED FOR US TO HAVE (A DEAL) ONLY WITH MEXICO.