As talks between U.S. and Canadian negotiators to update the North American Free Trade Agreement have faltered ahead of a key deadline, President Donald Trump’s administration has indicated it will move forward with its plan to place pressure on its northern neighbor by pursuing a bilateral U.S.-Mexico trade deal instead.
“We’re very unhappy with the negotiations and the negotiating style of Canada,” Trump told reporters during a press conference on Wednesday night as he threatened to slap tariffs on cars manufactured in Canada.
Having failed to reach a trilateral deal one month after the administration notified Congress of its deal with Mexico (which left open the possibility that a deal with Canada could also be struck) U.S. Trade Representative Robert Lighthizer is poised to release text of the bilateral agreement with Mexico as soon as Thursday. “I think Canada would like to be in the agreement. I think the U.S. would like them in the agreement,” Lighthizer said earlier this week. “Hopefully, we’ll end up with something with Canada. If not, we’ll have to do it in a separate deal as soon afterwards as we can.”
Business groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers say that leaving Canada out in the cold with the new trade agreement has the potential to disrupt deeply-rooted supply chains and harm a wide array of American consumers and industries. And even as House Republicans have publicly fallen in line with the White House’s stance on the issue in recent weeks, interviews with their counterparts in the Senate point to the fact that passing such a deal in Congress would be nearly impossible.
The text of the deal is due by Sunday under Trade Promotion Authority, a law that gives trade deals preference in Congress by limiting debate time, amendments, and preventing the filibuster when up for consideration in the Senate. Sixty days later, Trump will be able to sign the agreement alongside outgoing Mexican president Enrique Peña Nieto, whose left-leaning successor would want to make changes to the deal if it is not finalized before he takes office on December 1.
Although Sunday’s deadline is likely to come and go without agreement text involving Canada, Lighthizer still insists that the country can join the agreement going forward and that negotiations will continue, a prospect that raises questions of legality under TPA. Lawmakers say the White House has been unconcerned by such questions.
On Wednesday morning, some House Republicans offered winding non-answers, while others expressed vague support for the administration’s strategy when asked whether they would vote for a deal with Mexico only, as opposed to a modernized trilateral NAFTA. “I would [support it] at this point in time,” said Tennessee Republican Diane Black.
“It’s important that we move forward and put some pressure on Canada to come to the table,” Black said. What if Canada doesn’t come to the table? “Well, I think that pressure is put on them because it only increases the difficulty with them getting their products here in the United States,” she said. “And I think that we’ve had that relationship for a lot of years.”
Oklahoma Republican Tom Cole told THE WEEKLY STANDARD he felt the same way, because “a deal is better than no deal.”
In the Senate, the state of play is even clearer. “Canada and export with Canada is extremely important to Oklahoma,” said Senator James Lankford, noting that the Canada is his state’s primary export location. “So it is important to us that we actually have that negotiation with Canada and be able to resolve whatever issues we can.”
Ohio Democrat Sherrod Brown, who is Trump’s ally on certain trade matters, told TWS that a bilateral deal would be unacceptable. “No,” he said. “It’s not a renegotiation of NAFTA. You have to have all three NAFTA countries . . . They need to go back to the table and get Canada in.”
Brown also noted procedural concerns with the administration’s strategy. “When some in the administration say we can do this and it’s TPA-compliant, I’m not saying they’re lying—they just don’t know because it’s the parliamentarian who makes that decision,” he said.
Republican whip John Cornyn shared similar concerns, telling reporters that the bilateral pact might not qualify for TPA protections, bringing the threshold for passage in the Senate to 60 votes, rather than a simple majority of 51 votes. “So I hope Canada decides to join, because that’s just going to make ratification much harder,” he said.
The Texas senator added that the Senate Finance Committee has a meeting with Lighthizer scheduled for Thursday. Asked whether he intends to share his thoughts about TPA-compliance with Lighthizer, Cornyn answered, “Oh he knows. We’ve been talking about that since the beginning. He just doesn’t seem to listen.”
It is procedurally impossible for Congress to pass a trade deal under TPA during this Congress, which leaves open the possibility that Democrats might be calling the shots in one or both chambers come January. Cornyn told reporters it was difficult to envision Democrats widely supporting whatever trade deal the administration puts forward, which is why TPA protections should be regarded as necessary.
Cornyn also cautioned Trump against taking a drastic step to win support in Congress by noticing withdrawal from NAFTA when he signs the bilateral deal with Mexico, a move that would amount to putting a gun to Congress’s head.
“That would be a terrible mistake,” said Cornyn. “We don’t need more uncertainty. The economy is doing great, consumer confidence historic high, unemployment very low. That would be a recipe for reversing all the good things we’ve been able to do for the American people and for the economy.”
