On Aug. 27, he Trump administration and Mexico reached a tentative preliminary deal to replace the North American Free Trade Agreement, also known as NAFTA.
President Trump has been critical of NAFTA, calling the deal a “disaster” for American workers that encouraged U.S. manufacturers to move to Mexico. However, others claim that NAFTA reduced most of the trade barriers between it’s three signatories: the United States, Mexico and Canada.
Canada was left out the the preliminary deal, and President Donald Trump indicated that he may leave Canada out of the deal all together, instead renaming NAFTA, “the United States-Mexico Trade Agreement.”
President Trump is still offering Canada a chance to join negotiations. He has claimed that the deal is still possible “if they’d like to negotiate fairly.”
Canada’s Foreign Minister Chrystia Freeland cut a visit to Europe short in order to fly to Washington to try to join the trade talks.
“We will only sign a new NAFTA that is good for Canada and good for the middle class,” said Adam Austen, a spokesman for Freeland, in the New York Times.
The preliminary deal with Mexico could encourage manufacturing to move to the United States. However, the deal would have to be ratified in each country before it could take effect. The United States Congress would not vote until after the November midterm elections.
President Trump was quick to claim victory, even though Canada has not yet signed the agreement.
“We just signed a trade agreement with Mexico, and it’s a terrific agreement for everybody,” said Trump. “It’s an agreement that a lot of people said couldn’t be done.”
President Trump and Mexico’s President Enrique Pena Nieto hope to seal the deal before Pena Nieto leaves office at the end of November. Trump would like to introduce the deal to Congress before Aug. 31 to give Congress the required 90 day notice to vote on a new deal.
Should the governments meet this deadline, the new trade deal would go into effect under Pena Nieto, instead of leftist President-elect Andres Manuel Lopez Obrador, who has resisted Pena Nieto’s efforts for reform.
Many questions remain to be answered before a final deal is reached, the most pressing of which is whether the United States is authorized to reach a deal with only Mexico. A senior administration official says yes, but others are unsure.
“It’s a question that has never been tested,” said Lori Wallach, director of the left-leaning Public Citizen’s Global Trade Watch, according to the New York Times.
Nevertheless, Canadian Prime Minister Justin Trudeau is considering the possibility that the three countries can reach a deal by President Trump’s Friday deadline to propose the deal to Congress.
“We recognize that there is a possibility of getting there by Friday, but it is only a possibility, because it will hinge on whether or not there is ultimately a good deal for Canada,” said Trudeau at a press conference. “No NAFTA deal is better than a bad NAFTA deal.”