Trump Reveals Start to Nafta Talks as Canada, Mexico Huddle

  • Lighthizer names John Melle as chief U.S. negotiator
  • Canadian and Mexican officials are said to meet in Ottawa

The U.S. is kicking off negotiations on a revamped North American Free Trade Agreement as soon as possible.

Three-way talks will be held Aug. 16 to Aug. 20 in Washington, Trade Representative Robert Lighthizer’s office said in a statement Wednesday. The details were revealed two days after Donald Trump’s administration unveiled its negotiating objectives for Nafta, and as trade officials from Canada and Mexico met in Ottawa on their own.

The U.S. announcement comes as the White House’s efforts collapsed to enact a new health-care law, casting doubts about the Trump administration’s ability to enact its policy agenda. The trade negotiations were interpreted by one observer as a shot across the bow of Canada and Mexico -- a unilateral announcement after a unilateral list of demands.

“We didn’t ask for this negotiation, they did, and yet they’re acting as if they have a unilateral right to set the table, make demands and concede nothing,” Derek Burney, a former Canadian ambassador to Washington and senior government official who helped negotiate the original Canada-U.S. Free Trade Agreement, which preceded Nafta. “That’s not the way it works.”

Representatives of the three countries met in Washington Tuesday to discuss next steps, while Canadian and Mexican trade envoys met again Wednesday in Ottawa, an official familiar with the plans said, speaking on condition of anonymity because the discussions are private. Mexico has called for talks to finish by the end of this year, ahead of a presidential election in mid-2018. Nafta talks couldn’t begin before Aug. 16 because the Trump administration is consulting Congress for 90 days.

‘Unpopular’ Pact

Wendy Cutler, a former acting deputy U.S. trade representative who is now vice president of the Asia Society Policy Institute, played down the significance of Lighthizer’s announcement. It’s not unusual for a host country to reveal a meeting on its own, she said, adding that key flash points make the administration’s stated hopes of a quick deal “very ambitious.”

“The thing is, Nafta’s just unpopular,” Cutler said in an interview. The deal will be controversial in Congress, which has sweeping powers during talks and must approve any agreement. “No matter how good the deal is, it’s still going to be carrying that baggage.”

Lighthizer also announced that John Melle, assistant U.S. trade representative for the Western Hemisphere, will be chief negotiator. Canada’s chief trade negotiator, Steve Verheul, is expected to lead talks for the northern nation, though Canadian Prime Minister Justin Trudeau’s government hasn’t confirmed that. Mexico’s efforts are being led by Economy Minister Ildefonso Guajardo.

Trudeau has mounted a multipronged campaign in the U.S. to preach the virtues of trade with Canada, and cultivated common ground with Trump by saying they’re both focused on jobs. “We look forward to modernizing Nafta into a progressive trade agreement, supporting the middle class and those working hard to join it,” Adam Austen, a spokesman for Foreign Minister Chrystia Freeland, said in a statement Wednesday.

Mixed Signals

The U.S. was adamant in its published objectives that a new Nafta reduces its trade deficits. That’s at odds with recent comments from Vice President Mike Pence, who said the U.S. is looking for a “win-win-win” solution. Burney isn’t so sure. “Those who say we’re now home safe and dry because there’s now no threat coming at us from Nafta -- I don’t know what they’re eating,” he said. “That’s not what I’m seeing.”

With the U.S. objectives published, observers now expect the administration’s focus to pivot to taking the temperature of lawmakers and refining some of its more vague proposals.

“Congress is being underestimated,” Christopher Sands, a senior research professor and director of the Center for Canadian Studies at Johns Hopkins University, said in an interview Wednesday with Bloomberg TV Canada. It will be much harder for U.S. lawmakers to change Nafta -- not unlike changing health care -- because it’s something already in place, he said, as opposed to introducing a brand new measure like the Trans Pacific Partnership. “That’s going to make Congress very conservative,” he said.

Both Burney and Cutler echoed that, saying the protectionist climate will complicate any deal. So far, “I would have trouble characterizing it as a negotiation. It sounds more like an ultimatum,” Burney said, urging Trudeau to begin laying out out his own objectives publicly. “The time for charm is over.”

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE