Canada and US meet as Trump moves ahead with Mexico trade deal
WASHINGTON — Canada’s foreign minister cut short a trip to Europe and rushed to Washington on Tuesday as President Trump’s top trade advisers reiterated that the United States is prepared to leave Canada out of a revised North American Free Trade Agreement with Mexico.
Touting the agreement with Mexico as a major win, Trump administration officials attempted to ratchet up the pressure on Canada, emphasizing the need to get a deal completed by the end of the week.
“The president, as he’s indicated, is fully prepared to go ahead with or without Canada,” Wilbur Ross, the Commerce secretary, said on Fox Business. “We hope that Canada will come in.”
He added: “If not, they will then have to be treated as a real outsider.”
Those comments are pressuring Canada to decide whether it would join the pact negotiated by its North American neighbors or allow itself to be cast out of a three-country agreement that has endured for nearly a quarter of a century.
Chrystia Freeland, the Canadian foreign minister, was expected to meet with Robert E. Lighthizer, the US trade representative.
“We will only sign a new NAFTA that is good for Canada and good for the middle class. Canada’s signature is required,” Adam Austen, a spokesman for Freeland, said Monday.
Ross said it was imperative to move quickly because of the lengthy process involved in getting a deal approved by Congress. The United States and Mexico have expressed hopes that they will have the agreement fully in place before the next Mexican administration takes office later this year. The Commerce secretary said he was confident that Canada would ultimately join the deal because the Canadian economy “can’t survive very well” without the United States.
Steven Mnuchin, the Treasury secretary, also said that the United States was prepared to move ahead without Canada, but suggested in an interview with CNBC that the two countries would likely strike a separate bilateral deal in that event.
“The US market and the Canadian markets are very intertwined,” Mnuchin said. “It’s important for them to get this deal, and it’s important for us to get this deal.”
The biggest changes to the trade agreement between the United States and Mexico would impact the automobile industry. Car manufacturers would be required to produce at least 75 percent of an automobile’s value in North America under the revised agreement, up from 62.5 percent, to qualify for NAFTA’s zero tariffs. They must also utilize more local steel, aluminum, and auto parts and have 40 to 45 percent of the car made by workers earning at least $16 an hour, which represents a victory for unions that have criticized NAFTA.
Some industry groups and trade analysts warn that these changes would ultimately raise prices on American cars, hurting buyers and straining US automakers, which would struggle to compete with imports from other countries. That could, in turn, give US automakers more of an incentive to shift production outside of North America.