Donald Trump won’t wait for Canada, new NAFTA sent to Congress

August 31, 2018

President Trump on Friday notified Congress that he was moving ahead with a U.S.-Mexico deal to replace NAFTA, possibly without Canada, said the top U.S. trade negotiator.

The move signaled that talks with Canada had bogged down ahead of the Friday deadline Mr. Trump set for Ottawa to get on board and keep NAFTA as a trilateral deal.

“Today the President notified the Congress of his intent to sign a trade agreement with Mexico and Canada, if it is willing 90 days from now,” U.S. Trade Representative Robert Lighthizer said in a statement.

Intense negotiations between Canada and the U.S. broke down Friday after a newspaper reported Mr. Trump’s off-the-record comment that he is not compromising with Prime Minister Justin Trudeau’s government, saying it the deal would be “totally on our terms.”

Mr. Trudeau’s team told the newspaper that the U.S. was not negotiating in good faith.

However, Canadian Foreign Affairs Minister Chrystia Freeland, the lead negotiator, said Friday that Mr. Lighthizer and his team have negotiated “in good faith and goodwill.”

She said Canada was still pursuing a deal that would be good for Canada.

“We know that a win-win-win agreement is within reach and that’s what we’re working towards. With goodwill and flexibility on all sides, I know we can get there,” said Ms. Freeland.

Mr. Trump’s remark, made off the record in an interview Thursday with Bloomberg News, was reported by The Toronto Star. The Star cited an anonymous source and claimed not to be bound by the agreement to keep the comment off the record.

Mr. Trump wanted to start the required 90-day layover before Congress can ratify the agreement.

The Friday deadline was aimed at getting the deal approved before the Dec. 1 inauguration of Mexico’s President-elect Andres Manuel Lopez Obrador, a far-left politician whom some fear will scuttle a deal.

The 90 days will run out Nov. 30.

Canada could still join the agreement, said Mr. Lighthizer.

“The agreement is the most advanced and high-standard trade agreement in the world. Over the next few weeks, Congress and cleared advisors from civil society and the private sector will be able to examine the agreement. They will find it has huge benefits for our workers, farmers, ranchers, and businesses,” he said.

He continued, “We have also been negotiating with Canada throughout this year-long process. This week those meetings continued at all levels. The talks were constructive, and we made progress. Our officials are continuing to work toward agreement.”

Replacing the 24-year-old NAFTA is a top priority of Mr. Trump, who calls the landmark trade agreement “the worst deal ever made.” The negotiations to rewrite complex trade agreement have dragged on for a year.

Canada stayed on the sidelines this summer while the U.S. and Mexico executed the hard bargaining.

A tentative U.S.-Mexico agreement was announced Monday, when Mr. Trump first said he was prepared to move forward without Canada.

If Canada is out, Mr. Trump threatened to submit the U.S.-Mexico deal with Congress and hit Canada with a 25 percent tariff on cars.

The U.S.-Mexico deal sought to end the mass exodus of manufacturing from the U.S., especially with automakers.

It would raise the minimum level of North American components in an automobile to qualify for tariff-free treatment under NAFTA from 62.5 percent to 75 percent.

The agreement also would boost wages for Mexican workers, keep agricultural products tariff-free, increase environmental standards in Mexico and overhaul rules for copyright and trade dispute resolutions.

The agreement would last 16 years, with an opportunity to review it and adjust the terms after six years.

A major sticking point for Canada is that the deal eliminated the settlement system for anti-dumping disputes, NAFTA’s Chapter 19.

The U.S. wanted to nix the system and Mexico agreed, but Canada wants the mechanism to fight the Trump administration’s tariffs on softwood lumber, paper and other products.

Meanwhile, Mr. Trump wants Canada to end its tariffs on dairy products, which can run nearly 300 percent.

Update hourly