Donald Trump wants you to believe that something momentous happened today for U.S. trade policy.
This is a tremendous thing. This has to do, they used to call it NAFTA, we’re gonna call it the United States-Mexico trade agreement. We’ll get rid of the name NAFTA, has a bad connotation because the United States was hurt very badly by NAFTA for many years, and now it’s a really good deal for both countries…
It’s an incredible deal, it’s an incredible deal for both parties, most importantly it’s an incredible deal for the workers and for the citizens of both countries. Our farmers are going to be so happy…
I will terminate the existing deal. When that happens I can’t quite tell you, it depends on what the timetable is with Congress, but I’ll be terminating the existing deal and going into this deal. We’ll start negotiating with Canada relatively soon.
Contrary to what the president said, what actually happened is that negotiations over NAFTA broke down a few months ago over disagreements between the U.S. and Mexico on automobile manufacturing. At that point, the two countries began one-on-one negotiations to resolve their differences. The announcement today was that those talks have concluded in an agreement. But rather than resume three-way talks, Trump is now threatening that Canada has to get on board with what the U.S. and Mexico have agreed to or he’ll put a tariff on their cars.
Upon reaching an "understanding" with Mexico on trade, Pres. Trump says he will be "terminating" NAFTA and "going into this deal" once an agreement is also reached with Canada.
— ABC News Politics (@ABCPolitics) August 27, 2018
This is their next move:
Lighthizer said the White House planned to send Congress a letter by Friday that formally starts a 90-day process for changing NAFTA. He said it was still unclear what precisely the letter might say. It could say the U.S. has reached a deal with Mexico, he said, or it could say that an agreement has been reached with Mexico in the hopes that Canada would be brought into the package at a later date.
So the Trump administration is basically telling Canada that the deal is done and they can get on board now or pay the consequences. Apparently Mexico is prepared to go along with them on that.
Mexican Foreign Minister Videgaray says Mexico’s deal with the U.S. is a “comprehensive” agreement, and warns that if Canada doesn’t reach a deal this week, it will be much harder for Ottawa to negotiate any changes to what’s already been agreed.
Meanwhile, Congress is supposed to start considering changes to NAFTA that might or might not include Canada. What’s the rush? You have to read all the way to the end of the Washington Post article to get to the answer.
If the administration doesn’t formally notify Congress that it has reached agreement with both Canada and Mexico by the end of August, Peña Nieto, the outgoing Mexican president, will not be able to sign it.
Negotiators want to get a deal wrapped up before López Obrador, who might demand additional changes, takes office.
The newly elected Mexican president takes office on December 1st. The plan is to get this deal through Congress in time for the current president to sign. If that means sticking it to Canada and Prime Minister Justin Trudeau, then that just sweetens the pot for Donald Trump.
This whole thing comes off feeling more like a mob deal than something that advances the diplomatic (or economic) agenda of the United States, which means that it feels exactly like something this president would do.