Lighthizer: U.S. Won't Bother Waiting for Canada on New NAFTA Pact

U.S. Trade Representative Robert Lighthizer has said the United States will begin moving forward on its bilateral trade deal with Mexico at the risk of leaving Canada behind.

The nation was already given until the end of September to reach an agreement that would effectively maintain the existence North American Free Trade Agreement, but has not indicated satisfaction with the current terms. Unfortunately, the U.S. wants to ensure a deal is in place before the next Mexican president assumes office — giving it precious little time to spend on Canada after the last year’s worth of negotiations proved ineffective.

“If we push it beyond [October 1st], then we have a new negotiation with Lopez Obrador and we don’t know where that would go at all,” Lighthizer said. “It would be unfair to all the people that have been involved — certainly the U.S. workers, farmers and ranchers — to start a new negotiation with a new president of Mexico.”

As unfair as it might be to Canada, the new timeline was established specifically so current Mexican President Enrique Pena Nieto could sign the trade deal before he leaves office on November 30th.

While we’ve previously covered Canada’s issues with the automotive angle of this particular trade deal (it doesn’t want tariffs), Bloomberg reports that the major sticking points revolve around dumping and dairy. The United States and Canada are at odds over anti-dumping dispute panels, contained under Chapter 19 of the current deal, which the U.S. wants to remove and Canada wants to keep in place. Another major qualm revolves around Canada’s protected dairy industry. While it isn’t mentioned in the latest draft of the deal, the U.S. has repeatedly asked for its northern neighbor to make concessions.

Ideally, the U.S. would like to see a three-way pact signed. This has left United States agreeable to a future where Canada joins an established pact with Mexico later on, Lighthizer explained. However, he also noted that the U.S. and Canada are still quite a way away from having a genuine agreement. “I think Canada would like to be in the agreement, I think the U.S. would like them in the agreement but there’s still a fair amount of distance between us,” Lighthizer said. “There are very large issues, issues of dairy and Chapter 19, a number of significant issues between us.”

Meanwhile, Canadian Prime Minister Justin Trudeau commented on the growing trade tensions alongside his foreign minister, Chrystia Freeland, who is heading NAFTA talks. Trudeau said that, while the deal between the U.S. and Mexico raises the possibility of Canada signing, he’s committed to standing up for Canadian interests in negotiations. Freeland declined to comment specifically on Chapter 19, saying only that “rule of law is an extremely important part of how we do things, including trade.”

Lighthizer says that, regardless of how the final deal looks, the NAFTA name is likely dead. Donald Trump hopes to use the term “U.S.-Mexico-Canada pact,” or USMC (an acronym the Marine Corps already uses), according to the Trade Representative.

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