President Donald Trump renewed his threat to walk away from the North American Free Trade Agreement, just as Canadian Prime Minister Justin Trudeau made his way to Washington on the eve of a new round of negotiations.
Trump told Forbes, in an interview published Tuesday, he thinks NAFTA will have to be terminated -- as signals mount the U.S. is putting potentially deal-breaking proposals on the table and as the top U.S. business group sounds the alarm.
The fourth round of talks resumes today. The U.S. is expected to detail a proposal for the auto sector that would raise the minimum content requirement for parts sourced in the NAFTA region and in the U.S. specifically.
"I happen to think that NAFTA will have to be terminated if we're going to make it good. Otherwise, I believe you can't negotiate a good deal," Trump said in the Forbes interview. He said he considered it a "great accomplishment" to pull out of the Trans-Pacific Partnership trade pact, which included the three NAFTA countries, and that he favors bilateral pacts.
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Trudeau is to visit the White House for meetings today with Trump -- with no joint news conference scheduled -- after he and his foreign minister, Chrystia Freeland, speak with members of the U.S. House Committee on Ways and Means. Trudeau will hold a news conference on his own after he meets with Trump.
While Trump has regularly targeted the U.S. trade deficit with Mexico in renegotiating the deal, tensions are rising with Canada, the top buyer of U.S. exports. The U.S. imposed duties on Canadian manufacturer Bombardier after a trade challenge filed by U.S. plane-maker Boeing Co. Trudeau and U.K. Prime Minister Theresa May have called on Trump to intervene.
Freeland, a former trade minister appointed to her role this year primarily to deal with NAFTA talks, has begun to issue warnings and temper expectations, saying in a television interview this weekend that the Trump administration is the most protectionist since the 1930s.
NAFTA talks, initially scheduled to run from today to Sunday in Washington, may now be extended. U.S. Trade Representative Robert Lighthizer, Freeland and Mexican Economy Minister Ildefonso Guajardo are now expected to meet Tuesday to wrap up the latest round, according to officials familiar with plans who spoke on condition of anonymity. Negotiations are expected to stretch through Monday, the officials said.
Speaking in Washington on Tuesday, Freeland declined to predict what NAFTA will look like in the future and reiterated that Canada believes in free trade. Freeland also characterized the current era as the "most uncertain moment in international relations since the end of the Second World War."
"What we'd like to do with NAFTA is modernize it. This is a 23-year-old agreement, and the economy has moved on," she told the Most Powerful Women conference in an interview Tuesday while also plugging Canada's proposal to add a gender chapter to the trade deal. "If you think that's a good idea, let the White House know."
U.S. Agriculture Secretary Sonny Perdue said Tuesday that he took Trump's comments to mean the president wants a trade deal with better terms.
"What President Trump said is that we want to redefine and renegotiate NAFTA in a free and fair trade deal," Perdue told reporters after swearing in the department's new undersecretary for trade. "We support him in that."
In an effort spearheaded by the U.S. Chamber of Commerce, hundreds of business leaders from all 50 states joined forces to increase pressure on Trump to remain in NAFTA.
In a letter signed by more than 310 state and local chambers of commerce, the business leaders urged Trump to update and improve, but not end, the trilateral agreement with Mexico and Canada.
"We recognize that this agreement is a quarter-century old. It makes sense to modernize it," said Glenn Hamer, president and chief executive officer of the Arizona Chamber of Commerce. "But for the love of God, don't do any harm to something that has been so economically beneficial to states all across America."
Trump administration officials have said they want a deal by December, which is a timeline that observers say is increasingly unlikely. Guajardo said last week that he wants a deal by the end of spring 2018. Mexican presidential elections and U.S. midterm elections next year threaten to add to tensions in negotiations.
Trump can withdraw the U.S. from the deal after giving Canada and Mexico six months' notice, though experts debate whether the president would require congressional approval.
Trudeau is to visit Mexico City on Thursday and Friday after his two-day Washington trip. It's his first official visit to Mexico, and Trudeau's office said he and President Enrique Pena Nieto will discuss trade.
Information for this article was contributed by Justin Sink and Alan Bjerga of Bloomberg News and by Franco Ordonez of the McClatchy Washington Bureau.
Business on 10/11/2017