The United States is suddenly proposing a sprint to the finish toward a new NAFTA deal within about four to six weeks — a jet-fuelled pace that aims to soar past political obstacles and procedural hurdles.
Is it doable?
Count veterans of NAFTA 1.0 among the skeptics. In interviews Tuesday, the top Canadian negotiator in the original NAFTA and the top American trade official who completed the pact under Bill Clinton expressed their doubts.
“I don’t think so,” said John Weekes, Canada’s chief negotiator in the original deal.
“These are complex things … These aren’t the sort of things you can just decide bang, bang … (It) has to be a good agreement that makes sense for all three countries — and not taking short cuts, and not agreeing to a bad deal.”
The stated reason for the hurry now is simple: U.S. negotiators argue that political events beyond the spring could make it harder to finish a deal and get final ratification votes. In a few months, the Trump administration could face a more hostile Congress, and a more combative Mexican president.
The U.S. argues that there are just two months left to get a deal this year; otherwise, procedural rules — including the more than six months required to ratify an agreement in the U.S. Congress — will make a final vote impossible before 2019.
‘It’s going to take time’
A more realistic timetable in Weekes’s mind would be a deal by December. That’s similar to the estimate offered by his former American counterpart Mickey Kantor — Clinton’s first U.S. trade czar foresees at least six months more of negotiating.
“It’s going to take time,” Kantor said. “Trade agreements don’t end before their time … There are a number of issues on the table — they have to be resolved.”
Compare the current and past timetables.
The original NAFTA took 14 months to negotiate. Lawyers then combed the text for errors, Clinton was elected and insisted on new labour and environmental side-deals, and then there were ratification votes. In the end, it all took about 30 months.
The current negotiations are into their seventh month. Of the roughly 30 chapters to complete, six are done so far. That’s not fast enough, current U.S. trade czar Robert Lighthizer said at the close of a round in Mexico City.
“Now our time is running very short,” said Lighthizer, who described the four-to-six-week horizon in a chat later with American media.
But the NAFTA veterans suspect something else is afoot.
The big squeeze
They believe the Trump administration is trying to squeeze the neighbours. “I think they’re trying to pressure the Canadians and the Mexicans into a quick deal,” Kantor said.
“I believe that Lighthizer thinks, and what President Trump thinks — if he understands this, which is debatable — is that the steel and aluminum tariff pressure will cause Canada and Mexico to fold.”
That theory was bolstered this week when the threat of tariffs was dangled over the table. Lighthizer suggested that if Canada and Mexico sign a quick NAFTA deal, that could void any tariffs before they take effect.
Weekes offers two bits of advice to the Canadians.
The first is to nod politely, agree to the sped-up timetable — and then just keep doing whatever they need to do to get the best possible deal.
“I would be inclined not to (admit my doubts about the timetable),” he said. “I’d say, ‘We’re prepared to proceed very, very fast … Speed — we’re prepared to go very, very quickly.”‘
Morneau says Canada asking for exemptions from US tariffs1:00
His second suggestion is to show a counter-threat on the steel and aluminum tariffs.
Weekes suggests mapping out a longer-than-necessary list of products — potential retaliatory targets — where tariffs would create maximum political damage for American politicians, but the least economic damage.
He would make that preliminary list public, in the hope that it scares a few people in Washington. He would hope never to have to use it. And he would ignore the Economics 101 lectures about tariffs being mutually destructive.
“I think we need to do something to make sure we don’t look like we’re pushovers,” Weekes said.
“If we roll over, we’re basically saying, ‘Come after us anytime. Be my guest.”‘
It’s not clear whether Trump’s tariffs will ever become reality.
Trump’s tariffs are polling badly
A newly released Quinnipiac poll said the tariffs are quite unpopular — with just 28 per cent of Americans wanting a trade war and 31 per cent wanting tariffs. Already the administration says the penalties might never come into effect for Canada and Mexico if there’s a new NAFTA.
The idea of tariffs on Canada is even becoming a political liability for the administration. For those Americans bashing the steel and aluminum plan, the notion of a trade war against Canada has actually become a favourite talking point.
President Donald Trump plans a more formal announcement within about a week. That coincides with a planned campaign rally in the steel-producing state of Pennsylvania, where there’s a hard-fought congressional election March 13.
On Tuesday, the president indicated he would be delicate in imposing tariffs: “We’ll do it in a very loving way,” he said, standing next to the prime minister of Sweden.
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