NAFTA OR NO NAFTA

Tricia Braid

Sep, 26, 2018  |  Today's News |  Exports |  Legislation & Regulation

U.S. Trade Representative Robert Lighthizer cast doubt on the prospects of the U.S. and Mexico reaching a deal with Canada on NAFTA by Sunday, September 30th. At the Concordia Summit in New York, Lighthizer stated: “The fact is, Canada is not making concessions in areas where we think they’re essential.”  “We’re going to go ahead with Mexico,” he added. “If Canada comes along now, that would be the best. If Canada comes along later, then that’s what will happen.”

 

The text of the U.S.-Mexico deal must be released by this weekend to ensure Mexican President Enrique Peña Nieto can sign a final pact before he leaves office later this year. While President-elect Andres Manuel Lopez Obrador (AMLO) has “supported” the current path of the negotiations, it is understood that if AMLO were the one who would need to sign the agreement, Mexico may ask to renegotiate parts of the deal seeking the more aggressive terms, per what AMLO campaigned on. In addressing the possibility that Canada may not be part of a trilateral deal AMLO recently shared “We would like the government of the United States and the government of Canada to come to an agreement so that the treaty can be trilateral, as it was originally signed,” while addressing reporters in Sonora. “But in the event that the governments of the United States and Canada do not come to an agreement . . . we would have to maintain the bilateral deal with the United States and seek a similar deal with Canada,” he added. “Obviously we can’t cut ties with either.”

 

With reality sinking in that they might be faced with a bilateral deal, some Members of Congress have started to admit that they will likely support a U.S.-Mexico deal. Senate Agriculture Committee Chairman Pat Roberts (R-KS) said that while a deal without Canada would be “counterproductive” but he would support a Mexico-only pact “if it comes to that.” Other members of the GOP remain steadfast in their earlier positions that Canada must be part of the deal. Senate Foreign Relations Committee Chairman Bob Corker (R-TN) was adamant, stating “Canada needs to be part of it. I don’t think they can even, in the time frame, do something without Canada, legally.” Sen. Pat Toomey (R-PA), who sits on Senate Finance claimed that the deal would “absolutely” have to be trilateral to be TPA-compliant but when asked if he planned to prevent a bilateral deal from being considered responded “Let’s wait and see what actually happens, and then I’ll be exploring all options.”

 

As for leadership, Senate Majority Leader Mitch McConnell (R-KY) remained reserved, stating “I think we have to wait until the interaction with the Canadians is completed in order to really make a judgment about the way forward.” At this time there are no new statements by any of the big four from Finance or Ways & Means on the possible scenario.

 

Any potential for a breakthrough?!? There is no word of meetings planned yet in New York — either between President Trump and Prime Minister Trudeau, or between lead negotiators Chrystia Freeland and Robert Lighthizer, according to the press. Though, Canadian officials say informal conversations might still happen on the sidelines of the U.N. General Assembly.

 

This update is provided by the North American Market Working Group of the Dialogue for Trade, of which IL Corn is a member.