After President Donald Trump threatened members of Congress over the weekend that he would “simply terminate” the North American Free Trade Agreement if Congress interferes with his ongoing trade negotiations with Canada and Mexico, House Ways and Means Chairman Kevin Brady avoided taking a firm stance on the legal questions raised by Trump’s strategy.
“Right now we’re just focused with USTR on trying to find common ground with Canada,” Brady said.
Trump indicated last week that if he could not reach an agreement with both Canada and Mexico by a key deadline on Friday, he would proceed with a bilateral agreement involving the United States and Mexico, without Canada. After several frenzied days of negotiations, such a deal remained elusive; the White House nonetheless notified Congress in a letter that Trump would sign a deal with Mexico—and with Canada, “if willing”—90 days later.
Text of a final agreement is due by the end of September. The White House says Canada can join the deal at any point before then.
Republican lawmakers argued last week that a bilateral deal with Mexico instead of a renegotiated trilateral NAFTA would not be legally compliant with the Trade Promotion Authority, a law that gives the White House so-called fast track authority in trade negotiations by limiting debate, amendments, and the Senate filibuster when Congress debates trade deals. Pennsylvania Republican Pat Toomey told reporters last week that the administration’s original letter of intent to renegotiate NAFTA specifically cited Canada and Mexico, and a modernization of the agreement, rather than a separate deal with just Mexico.
“What the administration submitted to Congress in setting up the opportunity to use TPA, and the expedited process that TPA allows, contemplated a revision to a tri-party agreement,” he said. “So it’s my understanding that this has to be a tri-party agreement.”
If Trump were to proceed with the bilateral track, the argument goes, then he would have to restart the process, which takes 180 days—which is far longer than lame duck Mexican President Enrique Peña Nieto will remain in office. The question of whether or not a bilateral deal would comply with requirements for fast track could ultimately come down to the Senate parliamentarian.
Asked whether a bilateral deal would be TPA-compliant during a hallway interview on Tuesday night, Brady dodged, telling THE WEEKLY STANDARD his focus “is on encouraging Canada to step up and engage seriously on negotiations.”
“We’ll cross that bridge if we need to,” he said. “The best trade agreement would be between all three countries. But not if Canada doesn’t negotiate constructively. I’d love to see them in there, but the clock’s ticking.”
Canadian and U.S. officials will meet again on Wednesday to resume talks, with several key disagreements still unresolved. Canada is remaining firm on its demand that an updated NAFTA include a dispute settlement system to challenge trade actions of the other parties, a system Trump’s trade team dislikes because it could lead to the overturning of Trump’s tariffs. “We will not sign a deal that is bad for Canadians and, quite frankly, not having a Chapter 19 to ensure that the rules are followed would be bad for Canadians,” Canadian Prime Minister Justin Trudeau said Tuesday.
“No NAFTA is better than a bad NAFTA deal for Canadians, and that’s what we are going to stay with,” he told reporters at the same event.
