According to insiders, the Trump administration is nearing a final deal with Mexico on a re-negotiated North American Free Trade Agreement, the end product of one long year of hard work on the part of economists and diplomats who are trying to make the president’s agenda come to fruition.
Unfortunately, even as American officials come to terms with our friends south of the border, several sticking points remain with the third member of the NAFTA agreement: Canada. Without Canada’s consent to deal, a renegotiated NAFTA agreement remains a thing of fantasy. If they refuse to come to the table and hammer out the remaining sticking points, President Trump may have no choice but to scrap the deal and begin fresh with two separate, unilateral trade pacts.
From the Virginian-Pilot:
Trump’s trade negotiators this week have been meeting with senior Mexican officials in Washington, and sources familiar with the discussions say the two sides have largely agreed to new rules on auto trade — a top priority for the White House — that could boost investment in the U.S. and curb a flight of domestic production and jobs to Mexico.
In exchange, the United States trade representative, Robert Lighthizer, appears to be showing flexibility on an earlier demand for an automatic five-year termination of NAFTA and a proposal to make it easier for the U.S. to press anti-dumping claims against seasonal produce like tomatoes from Mexico.
Multilateral trade negotiations typically include bilateral talks between nations, but the administration’s strategy to close a deal first with Mexico — without parallel discussions with Canadian officials — is unusual and could backfire.
“I think the Trump administration is playing a risky game if you have a final deal with Mexico and you present it (to Canada) as a fait accompli,” said Daniel Ujczo, an international trade lawyer who specializes in Canada-U.S. affairs at the law firm Dickinson Wright.
There are some legitimate concerns when it comes to doing it this way, not least of which is the issue of timing. Due to a host of clauses and laws, the Trump administration will have less than a month to present Canada with a new deal and get them to sign off on it. It’s hard to see how even the best trade negotiator would be able to do that. If that date gets pushed back, Trump will wind up having to contend with Mexico’s incoming populist president, a far-left businessman who may not be willing to go as far as Pena Nieto when it comes to making a deal.
Having said that, things are looking good, and there’s always the possibility that Canada’s Justin Trudeau will see the benefit of signing onto a new NAFTA deal rather than prolong negotiations and extend what could become a difficult trade war. Hopefully, all three sides can sign a deal and implement fair trade practices that will no longer punish the U.S. for being…well, the U.S.