NAFTA: U.S. in a hurry to complete quickly, even if it means separate deals

U.S. trade czar Robert Lighthizer listed three sets of elections later this year as a reason to hurry: the Mexican presidential vote in July, American midterms in November, and provincial campaigns in Ontario and Quebec.
(Photo By Stephanie Chasez/White House Official Photo )

The United States says it’s in a hurry to conclude NAFTA negotiations, arguing that political challenges over the coming months will make it increasingly difficult to complete an agreement if talks drag on.

If it fails in this goal of achieving a three-party agreement in the near future, the U.S. says it’s prepared to split the talks into one-on-one separate negotiations with Mexico and Canada.

U.S. trade czar Robert Lighthizer listed three sets of elections later this year as a reason to hurry: the Mexican presidential vote in July, American midterms in November, and provincial campaigns in Ontario and Quebec.

He also referred obliquely to a fourth concern looming in the political backdrop. For months, Republicans in Washington have been quietly expressing fear that their party will lose seats in Congress, or perhaps even lose power entirely, resulting in a more protectionist, progressive legislature with the ability to block any NAFTA ratification vote.

Lighthizer didn’t put it that explicitly. But for the first time he made public his hope of renegotiating NAFTA, completing the legally required consultations, and proceeding to a ratification vote before a new Congress gets sworn in next January.

That would mean completing the deal within weeks. American trade law requires a six-month consultation period with congressional committees as one of several processes before any final vote.

“Now our time is running very short,” he said at an event to close a round of talks in Mexico City, standing beside his colleagues Chrystia Freeland and Ildefonso Guajardo.

“All of this complicates our work. I fear that the longer we proceed the more political headwinds we will feel… We must resolve our outstanding issues soon to maintain the possibility of having this measure be considered by the current Congress.”

He said he’s willing to ramp up the pace of talks to make it happen – to work continuously to achieve a breakthrough, he said. He listed the major U.S. priorities as new rules for auto parts, more Buy American-friendly public procurement policies, and provisions that keep jobs on American soil.

And there’s something else he’s willing to do: split negotiations in three.

Lighthizer made public remarks that appeared to confirm something he allegedly told members of Congress behind closed doors a few weeks ago – leaving a meeting, they said he’d described the negotiations with Canada as more difficult and was willing to complete talks with Mexico first.

“We would prefer a three-way, tripartite agreement,” Lighthizer said Monday. “If that proves impossible, we are prepared to move on a bilateral basis if agreement can be made.”

He expressed frustration that only six chapters have been completed so far – with three more at this round. There are potentially up to 30 to conclude, including a newly announced energy chapter designed to lock in Mexico’s privatization reforms.

Freeland avoided committing to an immediate deal. She said the Canadian position remains as it was from the beginning, which is to work in good faith for the amount of time it takes to get a good deal.

“We absolutely would like to get a deal done. At the same time, we believe in working hard for a good deal, not just any deal,” she told reporters in Mexico.

“This is a very complicated negotiation. NAFTA is a complicated trade agreement. And some of the areas like (auto) rules of origin are really fiendishly complex. So we are going to do the work it takes to get a good – I will even say excellent – modernization of NAFTA.”

A new complication has landed on the table over the past week: a heated dispute over steel and aluminum tariffs. U.S. President Donald Trump insisted Monday that he remains 100 per cent committed to imposing tariffs but could remove them on Canada and Mexico if there’s a NAFTA deal.

The pending announcement has Europe, Mexico, and Canada all threatening retaliation, and trade analysts fearing an escalating tit-for-tat that undermines the global rules-based system.

Freeland reiterated Monday that the Canadian government will stand up for workers and respond with counter-measures to any tariffs.