A top House Republican lawmaker was noncommittal Tuesday about moving President Trump’s trade deal with Mexico through Congress without Canada’s approval. Rep. Kevin Brady, R-Texas, said he hoped that the U.S.’ North American Free Trade Agreement partner would reach an agreement and declined to speculate on what would happen if they didn’t.
“I still think the best thing for North America is a seamless three-country trade agreement, however the ball right now is in Canada’s court,” said Brady, who is chairman of the House Ways and Means Committee that has oversight of trade.
Asked if Congress would move to pass the U.S.-Mexican agreement without Canada, Brady declined to answer, instead saying he was hopeful that an agreement would be reached in the next month.
[Related: White House says Canada not needed on Mexico trade agreement]
The lack of support from Canada could cause Trump’s deal to stall in Congress, many lawmakers having argued that Canada must be on board to prevent the deal from disrupting NAFTA. The U.S.-Mexican deal “supplants,” in the administration’s own words, parts of NAFTA, creating an uncertain legal situation if Congress approves the deal.
The White House nevertheless on Friday submitted the trade deal to Congress after attempts to reach a deal with Canada fell through. Under Trade Promotion Authority, the law covering submitting trade deals, the president must give lawmakers 90 days notice. Friday was considered a deadline because it was the last day the deal could be submitted under the law while current Mexican President Enrique Pena Nieto, who negotiated the deal, is in office. His term expires Dec. 1.
Brady said submitting the deal to Congress would not prevent a deal from being reached with Canada later on, claiming the Obama administration set a precedent for that in its trade deals.
The main provision of the U.S.-Mexican agreement alters the so-called “rules of origin” raising up to 75 percent, up from 62.5 percent, the amount of North American-made parts needed for a car or truck to be duty-free under NAFTA. It also required that at least 40 percent of all auto content be made by workers earning at least $16 an hour or its equivalent. Both changes would force auto manufacturers to move more production back into the U.S.
The key issue for Canada was a section in the deal that scrapped NAFTA’s Chapter 19, which involves settling disputes over levies and anti-dumping rules. Maintaining the provision was a key concern for Canada. The section has been of much less interest to Mexico.
