IT'S HAPPILY NEVER NAFTA
Trump touts new trade pact with Mexico that skips Canada
President Trump announced Monday that the United States had struck a partial pact with Mexico to replace NAFTA — calling it “the largest trade deal ever made,” even though it does not include Canada.
Speaking from the Oval Office with Mexican President Enrique Peña Nieto on speakerphone, Trump also said he would scrap the name NAFTA, saying it had “bad connotations.”
“They used to call it NAFTA. We’re going to call it the United States-Mexico Trade Agreement, and we’ll get rid of the name NAFTA,” Trump said.
“It 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, and we look very much forward to it,” he added.
But the agreement largely involves the manufacture of cars and trucks and does not include numerous other areas now covered by the North American Free Trade Agreement.
Still, Trump hailed the proposed deal — which needs congressional approval — as a major win for the US.
“This is one of the largest trade deals ever made, maybe the largest trade deal ever made. It’s really something very special the two countries were able to come together and get it done,” he said.
The agreement would require 75 percent of automobile content to be made in the NAFTA region, up from the current level of 62.5 percent.
The deal also would require 40 to 45 percent of auto content to be made by workers earning at least $16 per hour, officials said, which could discourage manufacturers from shifting jobs south of the border.
Tariffs on imported steel and aluminum Trump imposed in May — which were not a part of NAFTA — will remain in effect.
The president said negotiations were continuing with Canada — but he also threatened new tariffs on America’s neighbor to the north.
“We’ll see if Canada can be part of the deal,” Trump said.
“One way or another, we’ll have a deal with Canada. It’ll either be a tariff on cars or it’ll be a negotiated deal. Frankly, tariff on cars is a much easier way to go. Perhaps the other would be much better for Canada.”
The agreement to revamp parts of 1994 trade deal came after about a year of often-tense negotiations between the US and Mexico.
Mexico’s president, meanwhile, was adamant that Canada be included in the agreement.
“I expressed the importance of his reinstatement in the process in order to conclude a trilateral negotiation this week,” Peña Nieto said about a call he had with Canadian Prime Minister Justin Trudeau.
“It is our wish, Mr. President, that now Canada will also be able to be incorporated in all this. I assume that they are going to carry out negotiations of the sensitive bilateral issues between Canada and the United States.”
Republican lawmakers also said Canada had to be included in the final deal.
“A final agreement should include Canada” in order to ensure that NAFTA continues to benefit America, said Senate Finance Committee Chairman Orrin Hatch of Utah.
Adam Austen, a spokesman for Canadian Foreign Minister Chrystia Freeland, said that Ottawa was “encouraged” by progress between Mexico and the US, but that her country would “only sign a new NAFTA that is good for Canada and good for the middle class.”
Mexico, Trump said, had also agreed to boost agricultural im- ports from the US as part of the agreement.
“Mexico has promised to immediately start purchasing as much farm product as they can,” he said.
Trump and Peña Nieto also said that a zero-tariff policy on agricultural products would remain and that Mexico would not restrict market access to US cheeses labeled with certain names.
Mexico has also agreed to recognize Kentucky bourbon and Tennessee whiskey as distinctive US products, while the US has agreed to recognize tequila and mezcal as distinctive Mexican products.
If finalized, the agreement would give Trump a partial victory in his ongoing trade wars.
There was no mention of his long-promised border wall.
One major demand Team Trump made — that a new deal would sunset every five years — had been rejected by both Mexico and Canada and was not included in the agreement.
As Trump and Peña Nieto ended their phone call in front of reporters, the Mexican president said he hoped for a “good toast with tequila, of course.”
“I send you an affectionate hug, ” Peña Nieto said.
Trump responded: “A hug from you would be very nice.”