Congress notified of U.S.-Mexico trade deal; Canada talks on hold

Keith Laing
The Detroit News
Canadian Foreign Minister Chrystia Freeland speaks at a press conference August 31, 2018 at the Embassy of Canada in Washington, D.C.

Washington — President Donald Trump told Congress on Friday he intends to sign a new trade deal within 90 days to replace the North American Free Trade Agreement with Mexico and Canada — "if it is willing." 

The announcement came after U.S. Trade Representative Robert Lighthizer announced on Friday that talks with Canada about joining a preliminary agreement with Mexico would be put on hold until Wednesday, setting up the possibility of the United States and Mexico moving forward with their own bilateral agreement if a deal with Canada cannot be reached. 

“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," Lighthizer said in a statement.  "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.

“We have also been negotiating with Canada throughout this year-long process," Lighthizer continued. "This week those meetings continued at all levels. The talks were constructive, and we made progress. Our officials are continuing to work toward agreement. The USTR team will meet with (Canadian Foreign) Minister (Chrystia) Freeland and her colleagues Wednesday of next week.”

Freeland also expressed optimism about the talks with the U.S., despite the fact that the Friday deadline that was initially set by the Trump administration to reach a deal was missed. 

"We are making progress in our talks to update and modernize #NAFTA, but we are not there yet," she tweeted. "Our focus remains squarely on workers, families and business. We know that a win-win-win agreement is within reach. We will resume talks next week." 

The announcement came after critical remarks President Trump made about Canada in an off-the-record in an interview with Bloomberg were published by the Toronto Star

“Here’s the problem. If I say no — the answer’s no. If I say no, then you’re going to put that, and it’s going to be so insulting they’re not going to be able to make a deal ... I can’t kill these people,” Trump said of the Canadian government.

Trump took to Twitter to blast the Star, which did not agree to terms that were set during Trump's interview with Bloomberg, apparently confirming the substance of the remarks attributed to him: 

"Wow, I made OFF THE RECORD COMMENTS to Bloomberg concerning Canada, and this powerful understanding was BLATANTLY VIOLATED," Trump tweeted. "Oh well, just more dishonest reporting. I am used to it. At least Canada knows where I stand!" 

Under the preliminary agreement with Mexico, which Trump plans as a replacement for NAFTA, the so-called domestic content requirement for cars would increase to 75 percent from 62.5 percent.

The Trump administration had pushed to boost the requirement to as high as 85 percent, and add a 50 percent U.S. mandate. But Mexico and Canada balked at those proposals and automakers vocally argued against them. 

Additionally, under the new agreement, 40-45 percent of an auto's content would have to be made by workers earning at least $16 per hour. Any changes to NAFTA, or effort to end the original agreement, would require congressional approval. Canada has also yet to sign off the proposed changes. 

In a letter to House Speaker Paul Ryan, R-Wis., Trump said, "I intend to enter into the agreement by the end of November 2018. 

"Accordingly, pursuant to section 106(a)(1)(A) of the Bipartisan Congressional TradePriorities and Accountability Act of 2015, I hereby notify the House of Representatives and the Senate that I intend to enter into a trade agreement with Mexico — and with Canada if it is willing, in a timely manner, to meet the high standards for free, fair, and reciprocal trade contained therein," Trump wrote. 

Automakers and business groups have implored the Trump administration to make sure that Canada remains included in any NAFTA replacement. 

"Auto rules included in the understanding reached between the United States and Mexico are predicated on Canada’s participation," John Bozzella, president and CEO of the Association of Global Automakers, which lobbies for foreign-owned automakers, said in a statement. "Without it, automakers’ ability to meet the various requirements and content thresholds will be severely constrained." 

U.S. Chamber of Commerce President and CEO Thomas Donohue added: “Anything other than a trilateral agreement won’t win Congressional approval and would lose business support. We appreciate the hard work of the negotiators from all three countries, and urge them to stay at the table and remain focused on concluding a deal that includes the U.S., Mexico, and Canada.”

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Twitter: @Keith_Laing