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Trump sends notice of Mexico deal to Congress; Canada talks to continue

A day of dramatic and intense North American Free Trade Agreement negotiations was capped by President Donald Trump notifying Congress of his intent to enter into a trade deal with Mexico with the hopes that Canada will soon follow.

Despite long days of high-level talks this week, the U.S. and Canada were unable to resolve outstanding differences, meaning Canada is out of a revised NAFTA — for now.

U.S. Trade Representative Robert Lighthizer said in a statement that Trump has started a 90-day clock for legislative action on the proposed pact with Mexico. However, the administration left the door open for Ottawa to rejoin talks before the revised agreement goes into effect.

Canadian negotiators are due back in Washington on Sept. 6 to continue talks, according to the statement.

"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. "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."

The Trump administration announced a partial deal on the terms of a new trade agreement with Mexico on Aug. 30, one that would boost auto worker wages as well as American and Mexican auto content in North American car production.

Aug. 31 was seen as a deadline to notify Congress of a deal, as it would ensure a vote by the current Republican-controlled U.S. Congress and that Mexican President Enrique Pena Nieto could sign the agreement before he leaves office on Dec. 1.

U.S. Trade Promotion Authority law requires that Congress be given 90 days' notice before a president can sign a trade agreement.

Positive thinking

Canadian Foreign Affairs Minister Chrystia Freeland maintained a relatively optimistic tone, saying of a trilateral deal, "I know we can get there."

Speaking at the Canadian Embassy in Washington late on Aug. 31, Freeland also expressed a steadfast desire to protect Canadian workers.

"Canada will only sign a deal which is a good deal for Canada," she said.

Freeland's comments came after a series of unforeseen developments.

The day began with the USTR issuing a rare statement on pending trade matters in which it blamed Canada for not making concessions on its dairy rules, which the U.S. argues lock out American dairy products.

Shortly after that statement, a report in the Toronto Star quoted Trump making off-the-record comments that a deal with Canada would be "totally on our terms." The remarks — made during a Bloomberg interview — could not be made public because, Trump said, "it's going to be so insulting and they're not going to be able to make a deal."

Freeland said in her press conference that she still believed American negotiators are operating in good faith despite Trump's reported comments.

Lighthizer also maintained a positive tone.

"This week those meetings continued at all levels," Lighthizer said in his statement. "The talks were constructive, and we made progress. Our officials are continuing to work toward [an] agreement."

Congressional consideration

With the 90-day clock now running, the Trump administration has 30 days under Trade Promotion Authority, or TPA, guidelines to provide the full text of the agreement to Congress for review and consideration.

Given that time frame, Canada still has a realistic chance of being included in a new NAFTA deal, said Inu Manak, a visiting scholar at the Cato Institute in Washington, in an interview.

"The fact that the notice left open the possibility of Canada joining later 'if it is willing' means that this Friday deadline is an arbitrary one for Canada," Manak said. "In reality, Canada still has at least another month to negotiate, because the TPA statute doesn't require a full text of the agreement to be made public for another 30 days after this notice of intent to sign is submitted. So we're looking at the end of September as a more realistic deadline for Canada."

But whether Congress will support an agreement is unclear, especially if it does not include a current NAFTA partner.

Despite Canada's omission from the current deal, Senate Finance Committee Chairman Orrin Hatch, R-Utah, said in a statement that he was "encouraged" by the progress made over the past several weeks.

"As the details of an eventual deal become available, I will evaluate it to ensure that the agreement will maintain and improve access for American products and services to Canada and Mexico, as well as protect American innovation," Hatch said.

Senate Finance Committee Ranking Member Ron Wyden, D-Ore., was more skeptical.

"It is premature for the president to announce he intends to sign a trade agreement when so many difficult issues remain unresolved," Wyden said in a statement. "It sure looks like the president is more concerned with announcing a deal during election season, rather than getting the best deal possible for American workers."

The deal agreed to between the U.S. and Mexico would require that 75% of auto content be produced in the U.S. or Mexico and would that 40% to 45% of auto content be made by workers earning at least $16 per hour.

It would also allow for zero tariffs on agriculture products traded between the U.S. and Mexico and would promote "Made-in-the USA" fibers, yarns and fabrics.

A senior Trump administration official told reporters in a background briefing following the negotiations Aug. 31 that "we intend to sign an agreement with Mexico and with Canada if it is willing to participate."

However, Trump did not seem deterred by the prospect of Canada not being part of a new NAFTA deal.

"If we don't make a deal on Canada, that's fine," Trump said at an event in Charlotte, N.C., during the afternoon of Aug. 31, according to White House pool reports.

Negotiations over NAFTA, the 24-year-old trade deal between the U.S., Canada and Mexico, began in August 2017.