September 28, 2018

Canada Still Has Options to Join NAFTA

 |  By: Mike Opperman

As the Trump Administration prepares to publish the text of its bilateral trade deal with Mexico, Canada is likely to be left on the sidelines. According to Jim Wiesemeyer, Pro Farmer policy analyst, President Trump and some members of Congress could decide to move ahead without Canada if they think Prime Minister Justin Trudeau is dragging his feet.

Negotiations around dairy remain a sticking point, and Canada isn’t giving much ground. Sen. John Thune (R – SD) isn’t optimistic.

“It sounds like the issues we are trying to negotiate with them are still pretty thorny,” Thune says. “It doesn’t sound like they’re willing to give us anything near what we need to get in terms of a deal on dairy.”

According to an article in Bloomberg, there are still options for Canada to come to the trading table.

1. Canada could still join

Canada could decide to be part of the trade package. There is a push to have the deal signed before Mexican president Enrique Pena Nieto leaves office on November 30. The countries are pushing for the deal to be announced, because U.S. trade law stipulates that the deal needs to be published 60 days before it is signed.

“We’re going to go ahead with Mexico. If Canada comes along now, that’d be the best. If Canada comes along later, then that’s what will happen,” U.S. Trade Representative Robert Lighthizer says.

2. Congress Fights Back

The U.S. started renegotiations by triggering a congressional process around a deal with all three countries. Some lawmakers have pushed back on that process.

“Congressional staff members cautioned that the administration would find little support on Capitol Hill for a deal that excluded Canada entirely and would be unlikely to move to a vote in the House if Democrats win control in November’s elections,” Wiesemeyer says.

If Congress doesn’t approve of the deal it could force the administration to restart the process, or come back when Canada is included, Bloomberg reports.

"I do believe that the majority do not accept a bilateral agreement with Mexico to the exclusion of our friends in Canada," Rep. Bill Pascrell (D-N.J.), ranking member on the Ways and Means Trade Subcommittee told Politico.

Rep. Ron Kind (D-Wis.) argues that a deal without Canada would deprive his state of dairy export gains. Kind and a group of lawmakers are urging Congress to slow down and take their time in negotiations to allow Canada to jump on board.

3. A Separate Deal?

“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,” Lighthizer told Bloomberg.

4. Stick with NAFTA 1.0

Through all of the negotiations, the original NAFTA is still being followed. The administration has to give six months’ notice to withdraw from the deal, and it’s unclear when or if that will happen. Doing so could set off another round of debate in Congress.


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