By yesterday evening, U.S. President Donald Trump pulled back from his comment made earlier in the day that he would issue an executive order to withdraw the United States from the North American Free Trade Agreement (NAFTA). But yesterday’s bluster suggests that negotiations could begin this August and be concluded by April 2018.
The Associated Press reports, “The president made the announcement at the end of a dramatic day following an evening phone chat Wednesday with Prime Minister Justin Trudeau, followed by another call with Mexican President Enrique Pena Nieto. Trump sounded satisfied that his peers had agreed to negotiate swiftly. This has been a top concern of Trump’s administration, which has expressed frustration over the pace.”
The article highlights, “Trump’s key campaign promise to renegotiate NAFTA is up against the clock: U.S. Congress has yet to sign off on negotiations, and there might be less than a year to get a deal before the Mexican election. The clock is ticking, in part because of the Mexican election. The Mexican government says it can’t conclude a NAFTA deal after the first quarter of next year, with an election in 15 months and the populist left on the move there. Trump’s point man on the negotiation, Commerce Secretary Wilbur Ross, has acknowledged that it gets harder if talks linger too much into next year. Which means the next few months might be the only window to renegotiate NAFTA – a key Trump campaign promise.”
Mexico’s economy minister Ildefonso Guajardo has stated he believes talks could start this August and be concluded within an eight month period. That would be just a few months before the July 1, 2018 general election in Mexico.
The early front-runner to be the next president of Mexico is Andres Manuel Lopez Obrador, a vocal opponent of Trump, who has stated, “[NAFTA] didn’t hurt, but it wasn’t the panacea”, suggesting he would be willing to walk away from the deal (unlike the current Mexican government).
In order for Trump to begin formal NAFTA talks, Congress must first approve the formal notice that would launch a 90-day process. Reuters explains, “The 90-day period is required under the so-called ‘fast track’ negotiating authority granted to the president by Congress. Fast-track allows only an up-or-down vote on trade deals, in order to streamline their approval and strengthen the U.S. negotiating hand with partner countries.” Bloomberg further explains, “Before starting talks, [the president] must lay out the administration’s goals and consult with key committees in the House and Senate.”
NAFTA talks beginning in August would mean Congressional approval of the 90 day notice sometime in May.
An eight-month negotiating process would indicate rushed talks. Former Canadian diplomat Colin Robertson has said the talks would likely take at least 12-19 months (presuming an August start to the talks, that would mean they might be concluded by March-April 2019). Robertson suggests that the ratification process in addition to that would take another 12+ months (so possibly between April 2019 and April 2020).
For Mexico, this would point to a ratification process for a renegotiated NAFTA under the next president of Mexico.
For Canada, this would mean the NAFTA ratification process would still be underway during the October 2019 federal election. Notably, an Angus Reid poll conducted this past February found that, “Only one-in-ten Canadians (10%) think Canada will emerge from NAFTA renegotiation better off than it is now. More than one-in-three (35%) say the country will be worse off.”
This has echoes of the October 25, 1993 federal election. While Jean Chrétien had argued during that election that Prime Minister Brian Mulroney had given away too much under the deal and that he would renegotiate it within six months of taking office, Chrétien opted for side deals and approved the deal on December 3, 1993.
Formal talks on the original NAFTA began in June 1991. It was signed by the three countries (17 months later) on December 17, 1992. The House of Representatives passed it on November 17, 1993 and the Senate passed it on November 20, 1993. U.S. President Bill Clinton signed it into law on December 3, 1993. NAFTA formally went into effect on January 1, 1994.
