Trump Administration Again Talks About Scrapping NAFTA for Bilateral Deals With Mexico, Canada
With Mexico and Canada balking at U.S. demands in NAFTA negotiations, President Donald Trump is contemplating replacing the deal with two bilateral agreements with Mexico and Canada, an administration official said June 5. The comment from Larry Kudlow, the president's chief economic adviser, followed a remark from Trump on June 1 that separate deals make sense "because you're talking about a very different two countries."
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Before NAFTA was ratified 25 years ago, Canada and the U.S. had a free trade agreement. Kudlow said the president could shift the negotiation strategy while leaving NAFTA intact. "The president's not going to withdraw from NAFTA, he's just going to try a different approach," he said. Kudlow, who was speaking on the president's favorite TV show, "Fox & Friends," said the president asked him to say on television that the administration wants to negotiate with Mexico and Canada separately. He said Canada had not given him a response on whether it would conduct a bilateral negotiation. Canadian embassy spokeswomen did not respond to our inquiries by press time. A Canadian official told a Reuters reporter in Ottawa, “NAFTA is a trilateral agreement and we continue to negotiate that trilateral agreement.”
"Countries that are different probably deserve different deals," Kudlow said. Even though NAFTA covers only three countries, and is not a large multilateral deal like the Trans-Pacific Partnership, the president feels when you have to compromise with a lot of countries, "you get the worst of the deals," Kudlow said. He also said "NAFTA has kind of dragged on," and said the president thinks this way may be faster.
Mexican Secretary of Economy Ildefonso Guajardo Villarreal criticized the idea in a statement issued June 5. “Mexico has been clear, and Canada has been clear, the main interest is to maintain an agreement that has been highly productive for the integration of North America. We believe that there would be a loss of value if this agreement ceased to be what it is and what we want it to remain: a trilateral integration in the continent.”
Senate Finance Committee Chairman Orrin Hatch, R-Utah, also panned the idea in a tweet. "Now is the time to stay the course and work with our trading partners to find a path forward on an updated NAFTA that will meet the high standards of bipartisan TPA [trade promotion authority] and gain the support of Congress," he said.
A top Chamber of Commerce official dismissed the idea. Senior Vice President for International Policy John Murphy tweeted, "The impediments to concluding the negotiations lie in US 'poison pill' proposals to (1) make compliance with dispute settlement panels voluntary, (2) introduce a sunset clause, (3) eliminate investor-state dispute settlement, and (4) gut procurement rules, among others. Both Canada and Mexico oppose these 'poison pills.' So do Congress and the U.S. business and agriculture communities. Negotiating two bilateral trade pacts won’t fix change those realities."