Trump Reaches Revised Trade Deal With Mexico, Threatening to Leave Out Canada
S E E D E D C O N T E N T
WASHINGTON — President Trump said on Monday that the United States and Mexico had reached an accord to revise key portions of the North American Free Trade Agreement and would finalize it within days, suggesting he was ready to jettison Canada from the trilateral trade pact if the country did not get on board quickly.
Speaking from the Oval Office, Mr. Trump promoted the preliminary agreement with Mexico as a deal that could replace Nafta and threatened to hit Canada with auto tariffs if it did not “negotiate fairly.”
“They used to call it Nafta,” Mr. Trump said. “We’re going to call it the United States-Mexico Trade Agreement,” adding that the term Nafta — which he has called the “worst” trade deal in history — had “a bad connotation” for the United States.
Yet while Mr. Trump may try to change the name, the agreement reached with Mexico is simply a revised Nafta, with updates to provisions surrounding the digital economy, automobiles, agriculture and labor unions. The core of the trade pact — which allows American companies to operate in Mexico and Canada without tariffs — remains intact.
Now, the question becomes whether a trilateral pact becomes a bilateral deal — or Mr. Trump’s threats pressure Canada to return to the negotiating table and accede to many of the United States’ demands.
The president’s apparent willingness to move on without Canada prompted confusion and concern among lawmakers — who said it may not be legally permissible, let alone smart — and businesses whose supply chains depend on a deal encompassing all three countries.
“Because of the massive amount of movement of goods between the three countries and the integration of operations which make manufacturing in our country more competitive, it is imperative that a trilateral agreement be inked,” Jay Timmons, the president and chief executive of the National Association of Manufacturers, said in a statement.
Mexican officials said on Monday that they wanted to have Canada back in the process and were working toward a trilateral deal by the end of the week. President Enrique Peña Nieto of Mexico, who joined the White House announcement via phone, said, “It is our wish, Mr. President, that now Canada will also be able to be incorporated in all this.”
But later in the day, Luis Videgaray Caso, Mexico’s foreign minister, signaled that Mexico might be willing to move forward without Canada.
“There are things that we don’t control, particularly the political relationship between Canada and the U.S., and we definitely don’t want to expose Mexico to the uncertainty of not having a deal,” Mr. Videgaray said in an interview. “Not having a trade agreement with the U.S., that’s a substantial risk to the Mexican economy. Literally millions of jobs in Mexico depend on access to the U.S. market.”
Both the Mexicans and the Americans have been eager to reach a fully revised deal by the end of August, a date that would give the Trump administration enough time to notify Congress that a deal had been finalized and still have that deal be signed by the outgoing Mexican administration of Mr. Peña Nieto.
“Ideally we’ll have the Canadians involved,” said Robert Lighthizer, the United States trade representative, adding that the administration planned to officially inform Congress by Friday of its intent to sign a new deal, a step required before Congress votes on a trade pact. “If we don’t have Canada involved, we will notify that we have a bilateral agreement that Canada is welcome to join.”
Chrystia Freeland, the Canadian foreign minister, will travel to Washington on Tuesday to continue negotiations, said her spokesman, Adam Austen, on Monday.
“We will only sign a new Nafta that is good for Canada and good for the middle class,” Mr. Austen added. “Canada’s signature is required.”
The revised deal with Mexico makes significant alterations to rules governing automobile manufacturing, in an effort to bring more car production back to the United States from Mexico. Those changes are being watched carefully by the United States auto industry, which has built its global supply chain around Nafta and expressed concern that the Trump administration’s efforts to rewrite it could raise prices of American-made cars and trucks. Automakers like General Motors and Ford have set up plants in Canada and Mexico, and American automakers routinely import car parts from other countries.
“Automakers urge the U.S. and Mexico to quickly re-engage with Canada to continue to build on this progress,” the Alliance of Auto Manufacturers, which represents most carmakers that sell vehicles in the United States, said in a statement. “The industry is hopeful that any changes to Nafta auto rules of origin continue to strike the right balance by incentivizing production and investment in North America while keeping new vehicles affordable for more Americans.”
In a briefing Monday, administration officials said the United States and Mexico had also reached an agreement over a “sunset clause,” proposed by the Trump administration, that would cause Nafta to automatically expire unless the three countries voted to extend it.
The two countries agreed to a review of the trade pact every six years that would extend its lifetime for 16 more years, officials said. That longer time horizon would give lawmakers a chance to review the pact’s progress, while giving businesses certainty for the near future.
The countries also agreed to limit the kinds of legal challenges that investors can make against foreign governments under Nafta. The oil and gas, infrastructure, energy generation and telecom industries are exempted from these more restrictive rules, and will operate under the previous terms, Mr. Lighthizer said — a win for those industries.
One contentious issue that remains unresolved is whether the administration will exempt Mexico from its steel and aluminum tariffs. Mr. Trump hit Mexico, along with Canada, the European Union and other nations, with 25 percent tariffs on steel and 10 percent tariffs on aluminum, in part to force concessions on other trade issues. Mexican officials said they expected the tariffs to be addressed down the road.
“I don’t think it was necessary to address them now,” Mr. Videgaray said. “We’d like those to be addressed alongside Canada. It would be great if we could have a trilateral agreement on lifting those and our retaliatory tariffs on U.S. goods.”
It is unclear how eager Canada will be to sign on to the revised deal. Relations between the United States and Canada have been strained for months and Mr. Trump has personally berated Prime Minister Justin Trudeau of Canada as “very dishonest and weak” and accused him of “false statements” after a tense meeting of global leaders in June.
Any agreement that does not involve Canada is likely to face legal challenges and intense opposition from Congress, which had granted the Trump administration authority to renegotiate Nafta as a trilateral deal.
“Nafta is a trilateral agreement. It requires legislation and a change to Nafta requires legislation,” said Senator Patrick J. Toomey, Republican of Pennsylvania. “I’ve told them any change has to go through Congress. There is not necessarily complete agreement about that.”
Senator Lamar Alexander, Republican of Tennessee, said no one “is envisioning” a revised Nafta that does not include Canada.
“Modernizing it is a good thing, but I hope the president takes whatever agreement he has with Mexico and gets one properly with Canada and we get back to business,” Mr. Alexander said.
Industry groups also said a final agreement must include Canada.
“Coming to terms with Mexico is an encouraging sign, but threatening to pull out of the existing agreement is not,” said Matthew Shay, the chief executive of the National Retail Federation. “The administration must bring Canada, an essential trading partner, back to the bargaining table and deliver a trilateral deal.”
The president, flanked by advisers including Mr. Lighthizer and Jared Kushner, hailed the preliminary agreement as “a big day for our country,” adding that “many people” had thought that no one could make a deal with Mexico.
Mr. Peña Nieto, who has at times exchanged harsh words with Mr. Trump as the two countries have squabbled over Mr. Trump’s proposed wall along their border, added a moment of praise on Monday.
“I recognize your political will,” Mr. Peña Nieto said, “and your participation in this.”
Catie Edmondson contributed reporting from Washington, Elisabeth Malkin from Mexico and Catherine Porter from Toronto.
Follow Ana Swanson on Twitter: @AnaSwanson .
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Another promise being delivered. President Trump is not only reshaping trade policy, providing fairness for the US and labor, but is also reshaping the GOP, moving it away from internationalism.
I like Trump's plan to tax American consumers and US car companies by slapping a tariff on cars from Canada.
Canada has no independent car manufacturers, there is no such thing as a Canadian car (the only difference is in brand names - I owned Pontiac Parisiennes, same as Bonnevilles) so the American manufacturers of cars in Canada and their shareholders are the ones that will suffer, but Trump doesn't see it that way because for him it looks like a big win).
That's my point. Trump's statement that he'll slap a tariff on cars from Canada is pure idiocy and reveals he knows nothing about trade or the car biz.
Unfortunately, as seen in the comments on this article, not that many Americans think as clearly as you have done and think that bullying other countries for economic benefit is the right thing to do, when all it will do is cost the American producers and growers, and then subsidizing them just costs the American taxpayers. It's a no-win situation that Trump thinks will impress the voting public.
Bingo.
Trudeau may buckle because he's an unripe sapling:
But I can't believe that Xi Jinping will bend for Trump, unless it is for something that is more beneficial for China.
Trudeau is much smarter and more capable than Harper was, and he's infinitely more so than Trump.
.
I agree with you on that.
Back bacon. It's not ham - it's sliced like ham, not strips like ordinary bacon, but it's still called bacon.
We sure as hell disagree on that - with Trudeau's policies in effect, I would not return to Canada, in order to not be in danger for my life.
I'm sure it won't come to that. Canada will trade fairly now or be left out in the cold.
Canadians are more used to the cold than most Americans anyway.
Moosehead Beer, Naniamo bars, Red River Cereal, beavertails, butter tarts, Laura Secord chocolates, Smarties (Canadian M&Ms), Aerobars, many superior maple syrup products and inexpensive generic medications will no longer be available to Americans. AND for those with excellent taste in alcoholic drinks, better switch to your bourbon, because you can say goodbye to the best rye whisky in the world, which is manufactured only in Canada:
You wouldn't shut down the Tim Hortons in America...would you??
The US is a bigger market for Canada than Canada is for the US. If the Canadians are smart they will sign the deal and get this moronic faux trade war over with.
Neither country really wants this; but Trump's ego will push this home one way or another. He doesn't care if the US economy suffers a temporary setback; he cares that the Canadian economy will suffer much, much, worse.
I will need to read the agreement with Mexico; but something tells me that the Mexico isn't hurt by this agreement- it just allows Trump to declare victory.
Obviously my comment was "tongue-in-cheek".
Of course it is, and sure Canada will suffer, but there are other world markets for Canadian products, like China, and then China also does manufacture and grow almost everything the USA does, so even though the shipping may be more, the cost will surely be less. I'm sure China would be happy to take Canada's wheat and wood - especially wood because China is short on paper.
The problem is that Trudeau is an amateur, and he has to be concerned about what he does because a federal election is coming up next year. He got points among the voters for standing up to Trump, but if he allows himself to get screwed by Trump it could be game over for him.
No one drinks Moosehead....even Canadians....they all drink Coors Light......where does that come from? BTW, who owns virtually all breweries in the world? Either SABMiller or InBev. Controlled from where?
One of my buddies from Canada likes our New York Maple Syrup so much he comes here and buys it and takes it home with him (I keep his name hidden as I don't want him to get his citizenship revoked)
Many inexpensive generics and the expensive meds too, will be unavailable to Canadians also.
Aerobars? Red River Cereal? Most of us don't even know what they are.......you're stretching here. If we want candy, don't you know the choices available here? I don't even get the draw of 'coffee crisp' bars.
As to alcohol, there are many exellent choices from around the world.......Now, if Canada would drop it's protectionist import regs, I'm sure that the U.S. would be far more receptive.....as they are now, it is not a level playing field as people cna briong lots of Canadian items to the U.S. for free, but Canadians can't bring U.S. goods to Canada for free. What is wrong with free trade?
Moosehead is the only Canadian-owned made in Canada beer - Even Molson's Export (crapper beer than Blue) is foreign owned.
A girl from New York City who I once knew would only buy honey in Canada, because she thought the "MIEL" honey was better than any in the USA. (Not aware of Canadian bilingual product labeling requirements) Canada has been generous to allow Americans to grow Maple trees - the Maple Leaf (is Canadian) forever.
Why? Just because Canada won't sell Canadian products to Americans doesn't mean it's reciprocal?
That's your loss.
What? Since when? Almost every time I went to the USA, and that was often, I brought back and declared American goods with me without paying any customs duty - there is a limit set - I thought it was around $500 per person before I left Canada.
Not having access to a drink created for Royalty is still a loss.
I think Canadians will be sorrier than we are
Thanks for nothing Donald Rump.
I think we need Canada more than they need us.
Looks like Canada may be coming around.
Agreed
I suppose "little kid" Trudeau will give in to the big bully, so that America can drink "Canada Dry".
Looks like that may be the case Buzz. I guess we will see.
I like Seagrams ginger ale better. Lol
For me, Vernor's ginger ale is the best. It has a genuine ginger taste and dances on your tongue.
I foresee that one day America will invade Canada for its 20% of the world's fresh water. Water wars have been predicted but the problem isn't quite bad enough yet.
I'll be heading out to do some shopping today. I will look for Vernors ginger ale. I trust your recommendation.
Have a good day Buzz!
I think everybody is looking at this from Canada's perspective. The US and Mexico have a deal - one that says auto workers MUST get paid at least $16 per hour.
To the auto workers of Mexico - de nada!
At this point, I don't know if I'm looking at it from Canada's perspective, or China's, but what I do look at is the value of the Canadian dollar converted to Chinese yuan - because I live on my Canadian pensions.
You've had an interesting life
Like Bilbo Baggins, I have had many adventures that most others don't experience, and I'm ready for more.
Not yet. I probably would not be welcome in Turkey.
But if you want to play that game, MUVA...
Have you ever been to Tetuan, Morocco, and seen the foothills of the Rif Mountains?
Have you ever been to Toledo, Spain, to see what a Spanish museum city looks like, and view a famous EL Greco mural on an ancient church wall?
Have you ever watched a bullfight in Marbella, Spain?
Have you ever been to Petra, Jordan, to see the temples carved out of the mountainside?
Have you ever been to Xi'an, China, to see the Terra Cotta Warriors?
Have you ever been to to an old castle in Ruthin, Wales, to enjoy a medieval Christmas dinner?
Have you ever been to Gibralter, and seen the "Rock" right up close?
Have you ever been to Coventry, England, to walk through the remains of the WW2-bombed famous cathedral?
Have you ever been to Bermuda, and lounged on its pink sands?
Have you ever been to Club Med in Eleuthera, Bahamas?
Have you ever been stared at by the denizens of Taba, Egypt?
Have you ever had to be exactly on time for an appointment in Zurich, Switzerland?
Have you ever been to see the site of the Passover Massacre in Netanya, Israel?
Have you ever inserted a prayer note into the cracks of the Western Wall of David's Temple in Jerusalem?
Have you ever caught a Mahi-Mahi fishing off the coast of Kona, Hawaii?
Have you ever been on an antique train to Whistler Mountain in British Columbia?
Have you ever stayed at the old Playboy Club in Jamaica?
Have you ever been to the Bathsheba coast in Barbados, where there is a small hotel called the Edgewater Hotel, that my second-best friend and I almost bought?
Although I could also list SO many places I've been to and seen in the USA, Canada and China, I've been to all the places and done all the things I listed above, and a LOT LOT more.
How about you, MUVA?