With his usual theatrics and sleight of hand, U.S. President Donald Trump has decided that NAFTA will be buried forever and replaced with a new deal, the U.S.-Mexico Trade Agreement.
President Trump is threatening Canada to accept the U.S.'s conditions, or else be left out of the 30-year-old North American trade deal forever. President Trump has said that he will undo NAFTA, and bring out a new bilateral deal with Mexico. This deal may or may not include Canada.
On cue, Canadian Foreign Minister Chrystia Freeland rushed to Washington under the media message that Canada has one week to accept conditions or be thrown out of the deal.
Like everything President Trump says, one has to look behind smoke and mirrors to see what it is real. While Canada should take it seriously, it isn’t the full story.
Today, many senators are questioning whether he even has the authority to negotiate bilateral agreements. Several U.S. Senators said that the Fast Track authority (or TPA) given to him by Congress was for NAFTA, not for two bilateral deals.
According to Inside U.S. Trade: “'NAFTA was a trilateral agreement,' Sen. Pat Toomey (R-PA), a member of the Finance Committee, told reporters. 'NAFTA was enacted with legislation, it required legislation to pass Congress and be signed into law in order to become operative. Similarly, a change to NAFTA requires legislation. What the administration submitted to Congress in setting up the opportunity to use TPA, and the expedited process TPA allows, contemplated a revision to a tri-party agreement. So, it’s my understanding that this has to be a tri-party agreement.'”
Other “fake news” and “enemy of the people” news agencies such as CNN and Time also questioned whether Trump even had a deal with Mexico at all.
In Time magazine, it says, “Moreover, revising NAFTA would require Congressional approval and Congress might reject a deal that doesn’t include all three countries. Earlier this year, 36 Republican senators including Senate Majority Leader Mitch McConnell were calling on Trump to keep the deal intact while modernizing it. Trump could try to abandon the deal without Congressional approval, but the move would likely draw legal challenges.”
It continues, “Perhaps more significantly, skeptics of the new deal have grounds to question whether the White House was entitled to negotiate a new trade deal in the first place. A 2015 law requires the Administration to inform Congress 90 days before beginning trade negotiations. The White House told Congress last year that it would renegotiate NAFTA, but never said it would start talks on an entirely new deal. (The Administration said Monday that it believes that it has met its legal requirement).”
CNN called it a "made for TV moment."
“There is no formal free trade deal between the U.S. and Mexico, only an agreement between the two countries on how to resolve key issues in their trade relationship as part of the NAFTA talks. The U.S. trade representative's office officially described the agreement as 'a preliminary agreement in principle ... to update the 24-year-old NAFTA with modern provisions representing the 21st Century. The 'U.S.-Mexico Trade Agreement' does not exist -- and likely never will.”
So then what is going on? From media reports, the U.S. and Mexico did discuss rules of origin on auto parts and raising wages in the Mexican automobile industry.
They agreed on an energy chapter, in which they undid many of the previous regime’s attempts to lock-in privatization of Mexico’s energy chapter, but seem to have accepted getting rid of language in the original NAFTA that protected Mexico’s right to keep its energy industry public.
Mexico also accepted Chapter 11 provisions specially on the energy industry that would curtail their ability to undo energy reforms and reverse energy contracts to U.S. multinationals.
Inside U.S Trade also says that both countries have accepted to extend their patents on biologics to 10 years. This means that Canadians will pay more for drugs, and that U.S. Big Pharma corporations will make more money.
In other words, Mexico seems to have agreed, in principle, to some setbacks and loss of control. This does not bode well for Canada.
As we move forward, the U.S. is demanding major concessions on Canada’s supply management system, claiming that Canada has “300 per cent tariffs." President Trump is threatening to impose auto tariffs, or to throw Canada out of the deal if we don’t comply.
Council of Canadians Honorary Chairperson Maude Barlow says that the U.S. is pitting our autoworkers against our farmers, something we could have avoided 30 years ago by not embedding ourselves entirely into the U.S. fold. She tweeted:
“Trump’s announcement of a trade deal with Mexico and to hell with Canada shows what we said 30 years ago about free trade with the U.S: putting all our trade apples in one basket would give the U.S. government and American corporations too much power over Canada.We were right!”
Mexico's new president elect, Andrés Manuel Lopez Obrador, has said that he is hoping for a trilateral deal.
Going forward, Canada must hold the line on our public service and environmental rights – for farmers, workers, and for people all over the world. We must not give into Trump's theatrics and bluster.