'If' NAFTA 2.0 proceeds, Trudeau wants to feel 'confident' on tariffs
With deadline in jeopardy, Canadians 'working on a broad range of alternatives,' PM says
As the Trump administration continues to link the lifting of steel and aluminum tariffs to a successful conclusion of trade talks, Prime Minister Justin Trudeau says Canadians need to feel confident about what will happen 'if' they move forward.
Speaking at a press conference before leaving the United Nations General Assembly in New York to return to Ottawa, Trudeau said he's discussed the tariffs the Americans justify on "national security" grounds in many conversations with the U.S. president. Donald Trump insisted "a few times" that "if we renegotiate NAFTA ... there will be no need to worry about these other things," Trudeau said.
Getting the right deal for Canada, Trudeau said, "involves obviously feeling confident about the path forward, as we move forward, if we do, on a NAFTA 2.0," he said, including a "lack of punitive tariffs that we consider are unjust."
The U.S. steel industry continues to operate below its capacity, so the Trump administration believes these tariffs protect domestic jobs. They've also helped increase prices, and resulted in profits, for the U.S. industry.
But the administration's use of provisions intended to protect industries vital to national security is controversial, and now subject to a challenge at the World Trade Organization from countries who believe they unfairly manipulate global trade to the U.S.'s benefit.
When the U.S. reached a preliminary agreement in principle with Mexico last month, it did not agree to lift steel and aluminum tariffs with that country, although it did include a side letter that would cap automotive exports from Mexico in return for not adding more national security tariffs on Mexican cars and parts.
As a country providing significantly more steel and aluminum to the U.S. market, Canada is more reluctant to sign on to a deal that doesn't guarantee an end to national security tariffs between the two trading partners.
'Range of alternatives' for Canada
Trudeau declined to "negotiate in public" during his press conference, saying only that a renewed NAFTA would be a trilateral agreement between the three countries, despite the fact that this week was set as a deadline for sending revised text to Congress and it appears no agreement is within reach.
The prime minister said Canada would work "as long as it takes to get the right deal for Canada." He said there were a "broad range of alternatives, a broad range of paths" ahead for the negotiations.
Nevertheless, the U.S. intends to proceed with sending text for its two-way deal with Mexico to Congress, although some observers have expressed skepticism this text is ready or even workable without Canada in the deal. It's also unclear a Mexico-only deal would win Congressional approval.
The Mexicans have said they negotiated some things on the assumption that Canada would be part of the deal, but also appear willing to proceed alone, faced with the pressure of their political calendar.
At a Toronto event sponsored by Politico Wednesday morning, Canada's ambassador in Washington said he had no talks planned this week for last-minute deal-making, although he could return quickly if required.
Asked to rate the likelihood of Canada meeting this weekend's deadline for a deal, David MacNaughton answered it was about a five out of 10 chance, suggesting it's unclear the U.S. wants to do what it takes to have a deal, including lifting these U.S. tariffs.
During a question-and-answer session on the sidelines of the UN event in New York yesterday, U.S. Trade Representative Robert Lighthizer said Canada and the U.S. have to get a NAFTA deal done and "then we'll turn to steel."
Trump's top trade official said that although they were "running out of time" for this deadline, talks with Canada will continue.
"We're certainly not going to give up," he said.
No 'choice' with Mexico
Lighthizer was pressed on why this deadline is important — while it would allow the outgoing Mexican president to sign it before leaving office on Dec.1, the incoming president has had officials present for the recent negotiations and is willing to accept the deal that was reached.
He implied that that a new Mexican president would require a new negotiation, and that would be "unfair to all the people involved," including U.S. farmers and workers hoping to benefit from the deal.
"We don't really have any choice," but to push ahead with Congress on the deal already reached, he said.
"If we push it beyond that day then we have a new negotiation with [incoming president] Lopez Obrador and that's ... we don't know where that would go at all."
Lopez Obrador's election platform had a nationalist bent. He's a strong proponent of domestic economic development.
"If Canada comes along now, that would be the best. If Canada comes along later, then that's what'll happen," Lighthizer said.
Frustration with the state of the current talks was evident. While Trump's negotiator said Canada wasn't making concessions that Americans feel are "essential," he also implied some on the American side don't understand a deal will require compromises.
"You can't have it both ways," he said. "You can't say, 'Oh we absolutely have to have Canada,' and 'Oh, Canada has to give on a whole variety of things.' It's one way or the other," the U.S. trade representative said.
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