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Trump goes with US-Mexico trade deal, no Canada, next steps, problems

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donald trump justin trudeau canada
Canadian Prime
Minister Justin Trudeau (R) is greeted by U.S. President Donald
Trump prior to holding talks at the White House in Washington,
U.S., February 13, 2017.

Reuters/Carlos Barria


  • President Donald Trump notified Congress that the
    administration plans to enter a new bilateral trade deal with
    Mexico, starting an official countdown.
  • The notification does not include Canada, the other
    member of the North American Free Trade
    Agreement. 
  • Talks between US and Canadian officials failed to
    produce an agreement Friday.
  • US officials said negotiations with their Canadian
    counterparts will continue next week, and Canada may join the
    US-Mexico agreement “if it is willing.”
  • Here are the next procedural steps to move forward with
    the deal and the outstanding issues that need to be resolved
    between the US and Canada.

President Donald Trump is moving forward with a bilateral trade
deal with Mexico after talks with Canada to finish a full North
American Free Trade Agreement overhaul stalled Friday.

Trump’s decision to notify Congress about the new US-Mexico
agreement does not mean that Canada can’t be included in a final
deal. But it does officially start the countdown clock.

Here are the next steps

To renegotiate NAFTA, Trump decided to use Trade Promotion
Authority, or TPA, also known as fast-track authority. This
method allows Congress to approve a deal with a simple majority
vote, avoiding a possible filibuster in the Senate. It also
creates a statutory timeline for notifying Congress of any deal.

  • Trump’s notification of an intent to enter into an agreement
    with Mexico triggers a 90-day waiting period before Congress can
    take up the deal for a vote.
  • As part of that waiting period, the Trump administration must
    produce the text of the deal 60 days before the vote.
  • This gives the US Trade Representative and the rest of the
    administration 30 days to hammer out the fine details if they
    want to get a vote as soon as possible.

But questions remain regarding the legality of a bilateral
agreement with Mexico under the current TPA.

Some trade experts and lawmakers believed that the wording of the
TPA being used in the NAFTA renegotiation is restricted to a
trilateral agreement, with both Canada and Mexico included.

Other experts, such as Vanderbilt University law professor Tim
Meyer, believe the Trump administration can use the current TPA
but may need to add another procedural step. The TPA has two
different 90-day notification steps: alerting Congress to the
intent to negotiate, and alerting Congress to the intent to sign
a deal.

The Trump administration’s notification to negotiate, Meyer told
Business Insider, included both Canada and Mexico. So the Trump
administration may need to first notify Congress of the intent to
negotiate with just Mexico, adding another waiting period.

Ultimately, the decision on whether or not this TPA covers
the bilateral deal may come down to the Senate parliamentarian —
the official rules-keeper of the chamber. 

Where things stand with Canada

While Friday’s deadline was arbitrary, the notification to
Congress does start a countdown clock for US-Canadian
negotiations.

US Trade Representative Robert Lighthizer called the talks
with Canada “constructive” and a senior administration official
expressed hope that the Canadians would join the deal.

“We continue to be in the process to work with Canada in
terms of whether they want to be part of this historic agreement,
but certainly that remains our intention,” the official said in a
call with reporters.

Canadian Foreign Affairs Minister Chrystia Freeland was
also optimistic at a press conference Friday afternoon, telling
reporters that she believes a deal is within
reach,
 as long as all parties show “goodwill and
flexibility.” 

“The Canadian government will not sign an agreement that doesn’t
work for Canadians,” she added.

Both US and Canadian officials declined to answer
reporters’ questions Friday afternoon about the individual trade
issues that still need to be resolved. Freeland said both sides
have committed to avoid “negotiating in public” due to the
intensity of the negotiations.

But based on reports, here are the issues that still need
to be resolved:

  1. Dairy: Trump has long
    complained about Canada’s protection
    for its dairy
    industry, which restricts the ability of US farmers to enter
    the market. Lighthizer told reporters Friday morning that
    Canada was not making concessions about US dairy access to the
    Canadian market. Freeland, on the other hand, said that Canada
    has offered concessions on dairy.
  2. Dispute settlements: The US is aiming to get
    rid of a binding dispute settlement process
    created in Chapter 19 of NAFTA
    that allows one member to
    bring a grievance about unfair trade practices, such as
    countervailing duties or tariffs. Canada wants to maintain
    those protections.
  3. Trump: His off-record comments to
    Bloomberg were
    leaked by the Toronto Star on Friday.
     In the remarks,
    Trump claimed that the US is fleecing Canada in the trade
    negotiations. The comments threw a major public-relations
    wrench into the talks.

When asked about Trump’s leaked remarks, however, Freeland
demurred and said she could only speak to the Canadian
position.

“My negotiating counterpart is Ambassador Lighthizer, and as I
said, he has brought good faith and good will to the table,” she
said.

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