Trump Reaches Revised Trade Deal With Mexico, Threatening to Leave Out Canada
“There are things that we don’t control, particularly the political relationship between Canada and the U.S., and we definitely don’t want to expose Mexico to the uncertainty of not having a deal,” Mr. Videgaray said in an interview. “Not having a trade agreement with the U.S., that’s a substantial risk to the Mexican economy. Literally millions of jobs in Mexico depend on access to the U.S. market.”
Both the Mexicans and the Americans have been eager to reach a fully revised deal by the end of August, a date that would give the Trump administration enough time to notify Congress that a deal had been finalized and still have that deal be signed by the outgoing Mexican administration of Mr. Peña Nieto.
“Ideally we’ll have the Canadians involved,” said Robert Lighthizer, the United States trade representative, adding that the administration planned to officially inform Congress by Friday of its intent to sign a new deal, a step required before Congress votes on a trade pact. “If we don’t have Canada involved, we will notify that we have a bilateral agreement that Canada is welcome to join.”
Chrystia Freeland, the Canadian foreign minister, will travel to Washington on Tuesday to continue negotiations, said her spokesman, Adam Austen, on Monday.
“We will only sign a new Nafta that is good for Canada and good for the middle class,” Mr. Austen added. “Canada’s signature is required.”
The revised deal with Mexico makes significant alterations to rules governing automobile manufacturing, in an effort to bring more car production back to the United States from Mexico. Those changes are being watched carefully by the United States auto industry, which has built its global supply chain around Nafta and expressed concern that the Trump administration’s efforts to rewrite it could raise prices of American-made cars and trucks. Automakers like General Motors and Ford have set up plants in Canada and Mexico, and American automakers routinely import car parts from other countries.
Under the changes agreed to by Mexico and the United States, car companies would be required to manufacture at least 75 percent of an automobile’s value in North America under the new rules, up from 62.5 percent, to qualify for Nafta’s zero tariffs. They will also be required to use more local steel, aluminum and auto parts, and have 40 to 45 percent of the car made by workers earning at least $16 an hour, a boon to both the United States and Canada and a win for labor unions, which have been among Nafta’s biggest critics.