Donald Trump’s economic adviser said today the U.S. has asked Canada to hold one-on-one North American Free Trade Agreement negotiations as trilateral talks sputter.
Larry Kudlow, director of the U.S. president’s National Economic Council, said Trump is now “very seriously contemplating a shift in NAFTA negotiations.”
“His preference now, and he asked me to convey this, is to actually negotiate with Mexico and Canada separately,” he told Fox News Tuesday.
Kudlow said he spoke yesterday with one of Canada’s “top people, right next to the prime minister” about the president’s “new thinking,” and is now awaiting a response from Canada that could come as early as today. He did not name the official.
“I’m waiting to hear what their reaction is going to be, frankly,” he said.
A senior Canadian official said the government is aware of Kudlow’s comments and similar remarks made by the president in past.
Canada’s position, the official said, is that the negotiations are for a trilateral agreement. Discussions between individual NAFTA partners already happen regularly — so in that sense one-on-one talks are already happening, the official added.
Andrew Leslie, the parliamentary secretary to the foreign affairs minister in charge of Canada-U.S. relations, said there has been speculation about separate negotiations for 18 months, but Canada remains focused on a trilateral agreement.
“As Canada has maintained right from the beginning, we believe in a trilateral NAFTA, we believe that together it’s been a win-win-win for our three economies and all three nations have prospered,” he said.
François-Philippe Champagne, Canada’s international trade minister, echoed Leslie’s comments.
“We know that a trilateral agreement has provided millions of good jobs on both sides of the border and it also reflects the supply chain,” he said on Parliament Hill Tuesday.
“You have to look at the integrated nature of our supply chain — (for) more than 24 years, the supply chains have been integrated — which have provided better prices for consumers, better opportunities for manufactures and, obviously, workers.”
Mexico’s Ambassador to Canada Dionisio Pérez Jácome said his country is focused on working toward a renegotiated NAFTA rather than a bilateral agreement with the U.S., regardless of the tariffs imposed by the United States.
“Mexico has been very clear what we want out of this negotiation,” he told CBC News Network’s Power & Politics on Tuesday.
“It is based on our constitutional principles, it is based on the values that define who we are and what we believe in, on the defence of an open fair and trade international system. And that position is not going to change due to declarations of rhetoric or to these type of measures.”
Asked if he thought it was possible for the three countries to agree on a renegotiated NAFTA, Pérez Jácome said it can happen — but only if the right deal can be struck.
“We will continue to engage in a very positive (way), in good faith, in trying to reach an agreement. We believe it’s possible to reach an agreement,” he told host Vassy Kapelos. “In our case, we would never sacrifice quality for speed.”
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Kudlow said that a bilateral approach would be a way to address significant differences between the countries.
“Canada is a different country than Mexico, they have different problems and you know, (Trump has) believed that bilateral has always been better,” Kudlow said.
“He hates large treaties. I know this is just three countries, but still, you know, oftentimes when you have to compromise with a whole bunch of countries you get the worst of the deals.”
Kudlow said Trump is not going to withdraw from NAFTA, but wants to try a different approach. The president has in the past floated the idea of bilateral deals if NAFTA talks fail.
Former ambassador to the U.S. Derek Burney said bilateral talks are both feasible and desirable.
“I think that we should agree to explore, if for no other reason than to inject a constructive note into our trade dialogue with the U.S.,” he said.
Depending on the outcome, any deal coming out of a series of bilateral talks could supplant or incorporate NAFTA, said Burney, who was chief of staff to former prime minister Brian Mulroney during the final negotiations of the Canada-U.S. free trade deal.
Kudlow’s remarks came as tensions mount over the U.S. decision to end an exemption on steel and aluminum tariffs that initially had been granted for Canada, Mexico and the EU.
Canada countered by announcing it would slap an estimated $16.6 billion in duties on some steel and aluminum products and other goods from the U.S., including maple syrup, beer kegs, whisky and toilet paper.
Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland announced the plan last week, just hours after U.S. Secretary of Commerce Wilbur Ross confirmed the U.S. would impose tariffs of 25 per cent on imported steel and 10 per cent on imported aluminum, citing national security interests.
At a news conference announcing the new duties, set to kick in July 1, Trudeau said he abandoned a proposed meeting with Trump in Washington last week after the White House insisted that he first agree to a five-year “sunset clause” in a renegotiated NAFTA.
In a daily briefing today, White House press secretary Sarah Huckabee Sanders said Trump’s desire to hold one-on-one talks is not a sign that NAFTA is dead.
“It’s not done, but the president is open to having individual deals,” she said. “He’s looking at the best way to make sure he gets the best deal possible for American workers and whether or not that’s through NAFTA or other means, those options are on the table.”