A top House Republican leader warned Canada on Tuesday that his chamber will move ahead with a review and vote on a U.S.-Mexico trade agreement in principle without Canada if Ottawa doesn’t quickly wrap up NAFTA talks.
“Members are concerned that Canada does not seem to be ready or willing to make the concessions that are necessary for a fair and high-standard agreement,” Majority Whip Steve Scalise said in a statement.
“While we would all like to see Canada remain part of this three-country coalition, there is not an unlimited amount of time for it to be part of this new agreement,” the Louisiana Republican said. “Mexico negotiated in good faith and in a timely manner, and if Canada does not cooperate in the negotiations, Congress will have no choice but to consider options about how best to move forward and stand up for American workers.”
While it is a warning shot to Canada, a Scalise spokeswoman said her boss spoke for himself and no one else in House leadership.
Trump notified Congress in late August that he planned to sign an agreement in principle with Mexico as part of negotiations for revamping the 1994 North American Free Trade Agreement. Canada, the notification said, could be part of the final text the administration sends to Congress.
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Gregg Doud, chief agricultural negotiator for the U.S Trade Representative’s Office, told the Senate Agriculture Committee last week that part of the holdup is Canada’s Class 7 dairy, a pricing structure Canada created to address a surplus of Canadian skim milk powder. The U.S. dairy industry says the pricing practice keeps the price of skim milk powder components artificially low, which has reduced demand for U.S. ultra-filtered milk products.
The United States, Canada and Mexico launched renegotiation talks a year ago to update the trade pact, which was written before e-commerce existed, and to address provisions Trump said gave the two trading partners unfair advantages over the United States.
The Trump administration pressed Canada to finish negotiations by the end of August, but talks have spilled into September.
Canadian Foreign Affairs Minister Chrystia Freeland, who has been negotiating directly with U.S. trade officials, said she had not seen Scalise’s statement when reporters in Ottawa asked about it. However, Freeland said Canada “has been extremely cooperative” during the trade talks.
“This is the fourth week in a row that I will be traveling to Washington, and our officials have been there pretty much constantly since this intensive phase began,” Freeland said. “Canada is very good at finding creative compromises. Having said that, at the same time, it is our duty, it’s my duty to stand up for the national interest and I will always do that.”
Scalise said Congress cannot wait much longer for a U.S.-Canada agreement if it is to meet several timetables under the Trade Promotion Authority, which sets negotiating principles, steps for Congress to follow in reviewing and voting on trade pacts.
The president triggered the TPA timetables on Aug. 31 when U.S. Trade Representative Robert Lighthizer notified Congress of Trump’s intention to sign a trade agreement with Mexico and possibly Canada within 90 days.
Although Scalise indicated that Trade Promotion Authority would apply to a Mexico-only agreement, other lawmakers from both parties say they believe it would only apply to an agreement among the United States, Mexico and Canada. The Trump administration, they argue, notified Congress in 2017 that renegotiations would result in a three-county trade agreement based on TPA negotiating principles.
TPA protects an agreement from congressional amendments and allows the Senate and House to approve a trade pact with a simple majority vote.
Scalise’s position that the House will move forward without Canada is likely to raise objections from business groups that have traditionally been aligned with the Republican Party.
The heads of the Business Roundtable, U.S. Chamber of Commerce and the National Association of Manufacturers argued for a three-country NAFTA in a Monday letter to Lighthizer, highlighting six areas they want addressed in a final trade pact.
“American workers and families need an agreement that includes all three North American economies. It would be unacceptable to sideline Canada, our largest export market in the world,” the business leaders wrote.