In this April 21, 2008 file photo, national flags representing the United States, Canada, and Mexico fly in the breeze in New Orleans where leaders of the North American Free Trade Agreement met. THE CANADIAN PRESS/AP/Judi Bottoni

Optimism for a New NAFTA deal

 In Compliance Updates

‘There’s nothing like a deadline to drive people together’

Republican congressman Kevin Cramer thinks a new NAFTA deal is still possible before the current session of Congress winds up at the end of the year.

Enough progress has been made for the three NAFTA nations to find common ground to build an amended trade agreement, Rep. Cramer said Thursday in an interview with CBC Radio’s The House.

“I do like the tone, I do like the optimism and there’s nothing like a deadline to drive people together,” he said.

Congress originally gave a deadline of May 17 for a new NAFTA agreement, arguing that if it was given a deal after that date senators and representatives wouldn’t have enough time to do a proper analysis during the current sitting.

House Speaker Paul Ryan later walked back that statement, suggesting a more flexible deadline might be possible.

Cramer, who represents North Dakota, called the timeline for a deal “a little bit of a moving target.”

He said the United States International Trade Commission, a federal agency that offers trade expertise to Congress, estimated it would need up to 105 days to conduct an economic analysis of a new NAFTA deal, but that’s a ballpark number.

“There’s a sense that that might be able to shrink a little bit,” he said.

The deadline, however loose, should be enough to push negotiations to a conclusion, he argued.

“All of it adds a little pressure to everybody to perform a little bit better and perhaps a little faster than they’re comfortable with.”

Trump Calling Canada “Spoiled”

But as the window slowly closes, U.S. President Donald Trump has been turning up the heat. This week, he complained about the positions Canada and Mexico have taken in the negotiations, calling Canada “spoiled.”

“NAFTA is very difficult. Mexico has been very difficult to deal with. Canada has been very difficult to deal with … but I will tell you that in the end we win,” Trump told reporters this week.

Trump is threatening to slap tariffs of up to 25% on all vehicles imported into the United States. An action that essentially throws a wrench into NAFTA negotiations at a critical stage.

Map of Canada, United States, and Mexico as members of NAFTA

The U.S. Commerce Department said Wednesday that the administration was considering imposing tariffs on all imported vehicles under the little-used section 232 of the Trade Expansion Act of 1962.

The clause gives the president the power to impose tariffs on just about any foreign product if the White House believes it “threaten(s) to impair the national security.”

It’s not clear how those tariffs would affect Canada.

In less than a week, Canada and Mexico will lose their exemptions to new U.S. steel and aluminium tariffs — also imposed by Trump under section 232 back in March — unless a new NAFTA deal can be reached by June 1.

Prime Minister Justin Trudeau, in an interview this week with Reuters, said the threatened auto import tariffs are based on flawed logic and are part of Washington’s efforts to exert pressure on Canada and Mexico to renegotiate NAFTA along the lines laid out by the Trump administration.

Trudeau Predicts End of Tariffs if Trade Agreement Negotiations are Successful

Trudeau also predicted the talk of tariffs likely will end if the slow-moving NAFTA negotiations — currently mired on issues related to auto sector trade — are successful.

Cramer said he doesn’t have a sense of whether those auto tariffs will apply to Canada. However, he  added it’s not unreasonable to see them as connected to NAFTA negotiations — although not legally.

Hassan Yussuff, president of the Canadian Labour Congress, called the tariff threat “simply unacceptable.”

“This is not a way to conduct a relationship with your friends and your neighbours,” he told The House.

Graph Showing Trade Levels Among NAFTA Members

He said the focus in NAFTA talks needs to be on getting to the right deal. If the three countries don’t resolve major issues now, he said, they’ll set themselves up for problems down the road.

As for Trump’s comments about Canada being “spoiled” and “very difficult,” Yussuff said he thinks that shows the Canadian negotiators are doing something right.

“I think it speaks to the fact that we are good negotiators. We’re not going to simply concede to their demands because they simply demand something.”

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