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article imageSteel, aluminum tariffs go into effect June 1: Why no NAFTA deal?

By Karen Graham     May 29, 2018 in Politics
Canadian Foreign Affairs Minister Chrystia Freeland arrives in Washington D.C. today on a two-day mission to rekindle the stalled NAFTA negotiations.
Time is running out for the Trump administration, reports Reuters, as negotiators, industry lobbyists, trade experts, and lawmakers describe how U.S. trade negotiators wasted several months before presenting U.S. proposals that had been submitted to Congress in July 2017.
The thing is this - U.S. business groups labeled those demands “poison pills” that threatened to derail the talks and prompt Trump to quit the pact. And that cloud has been hanging over the talks the whole time. Negotiations that were supposed to last about four months have now gone on far too long.
All this has been particularly frustrating for Freeland and Mexican Economy Minister Ildefonso Guajardo. as they have been meeting with U.S. trade czar Robert Lighthizer in Washington for the past several weeks.
But the talks came to a halt after demands from the U.S. far exceeded what Canada and Mexico had expected. It seems that as the talks have progressed, the Trump administration has continued to pile on additional demands.
And time has become a critical factor. Canada’s latest reprieve from potentially crippling U.S. tariffs on steel and aluminum expires on June 1, and there are fears they could go into effect without a NAFTA deal in place.
As for Canada, Freeland is attempting to get a permanent exemption for Canada on the steel and aluminum tariffs, and additionally, she also wants Canada to be permanently exempt from any new American tariffs on the auto sector.
"It's going to be important for us to stay very focused," Perrin Beatty, president of the Canadian Chamber of Commerce, told CBC News. "What we are seeing ... is the strategy on the part of the White House, of simply piling more things onto the negotiating table."
It has come down to Trump threatening to impose the tariffs if Mexico and Canada don't cave to U.S. demands on NAFTA, and Canada refusing to link the tariffs to NAFTA.
And this seems to be the way the talks have gone - Negotiators thinking they have a handle on requests and working to come to agreeable solutions - only to be side-swiped by a new threat or demand from the Oval Office, like the latest new threat thrown into the mix last week. Trump wants to add a tariff of 25 percent on imported vehicles and auto parts.
Trump ordered the Department of Commerce to investigate whether job losses in the auto industry is a national security issue. "The idea that Canada and Canadian cars could pose any kind of security threat to the United States is frankly absurd," Freeland said during Monday's question period in the House of Commons.
Mexican Secretary of the Economy Ildefonso Guajardo is in Paris until Thursday this week, and will not be a part of the talk today and tomorrow.
More about Nafta, Freeland, congressional deadline, Auto sector, poison pills
 
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