It now looks increasingly likely - but not a certainty at this hour - that the May 17 deadline for the conclusion of the renegotiation of the North American Free Trade Agreement (NAFTA) will not be met by Canada, Mexico and the United States.
The Toronto Star reports, "No NAFTA deal will be reached by the Thursday deadline imposed by a top U.S. legislator, a Canadian government source and Mexico’s economy secretary said on Wednesday. U.S. House Speaker Paul Ryan says a NAFTA deal would have to be made by Thursday in order for this Congress, which is controlled by trade-friendly Republicans, to hold a vote by the end of the year. The Canadian source said there will be no deal of any kind by Thursday, even a partial 'agreement in principle'."
The Canadian Press adds, "Ministers hadn’t even scheduled their next high-level meeting, negotiating staff weren’t in the same country, chats were happening long-distance by phone and video conference, and less than one-third of the agreement’s chapters were fully completed. What’s unclear now is how long the negotiations might last: several weeks to be wrapped up by the Mexican election, several months to conclude before the U.S. midterms, or into a new calendar year."
A few days ago the Wall Street Journal outlined these four scenarios that could unfold:
1- "Strike a quick deal: The U.S., Canada and Mexico have hinted they are close to a deal on arguably the most difficult and important section of NAFTA—the rules for the North American auto industry. ...Such a deal would require the U.S. to compromise on other demands that are unpopular with its trading partners, including a 'sunset' clause to end NAFTA if it isn’t reapproved every few years, a plan to gut the agreement’s dispute-resolution provisions, and efforts to limit Canadian and Mexican companies’ procurement opportunities with the U.S. government."
2- "Extend the deadline: [The Speaker of the US House of Representatives Paul] Ryan set a deadline of May 17 to give the deal enough time to pass through the current session of Congress, but that deadline may not be as firm as the speaker suggests. ...If Congress is willing, a vote can still be managed if a deal is announced later in May, or even in June. ...Under [fast track legislation] rules, the Trump administration could finish the details over the next 30 days without falling behind on Mr. Ryan’s schedule, though the timeline would be tight."
3- "More brinkmanship: President Trump has repeatedly threatened to pull out of NAFTA if Canada and Mexico don’t agree to a major rewrite, and said as recently as Friday the current deal is a 'disaster'. ...The president must give partners six months’ notice to pull out of the treaty. He could well give notice to trading partners or Congress as a way of accelerating talks or even of encouraging lawmakers to quickly pass the deal. ...Mr. Trump’s campaign promises and prior warnings could lead him to return to a withdrawal from NAFTA if there is no deal at the negotiating table, according to people following the talks."
4- "Hold out for full NAFTA rewrite: Trade negotiations are notorious for breaking deadlines [and the NAFTA talks could continue into 2019]."
It's anyone's guess right now, but given today is the deadline set by Ryan, we'll be watching for any developments over the coming hours.
We'll also be watching for any news on the imposition of steel and aluminum tariffs on Canada (threatened by Trump to begin on June 1) and the Mexican election (taking place on July 1). Our analysis on the impacts on NAFTA of Andres Manuel Lopez Obrador becoming the Mexican president can be read here.
If you haven't already, please be sure to retweet this tweet by Council of Canadians trade campaigner Sujata Dey and like/share this Facebook post (that has already reached 31,025 people). You can also take action by sending an urgent 'don't rush a bad deal' message to Foreign Minister Chrystia Freeland here.