Congress

Canada and Mexico will act on new NAFTA once tariffs end, Grassley says

Country officials reaffirmed opposition to tariffs on steel and aluminum imports meetings last week

Chairman Sen. Chuck Grassley, R-Iowa, arrives for the Senate Finance Committee organizational meeting and hearing on pending nominations on Tuesday, Feb. 5, 2019. (Bill Clark/CQ Roll Call file photo)

Mexican and Canadian officials are serious about their countries not ratifying the proposed United States-Mexico-Canada trade agreement unless the Trump administration ends steel and aluminum tariffs on their products, Senate Finance Chairman Charles E. Grassley said Tuesday.

Grassley, R-Iowa, said the Mexican ambassador and the Canadian Foreign Affairs minister in meetings last week with him reaffirmed their countries’ opposition to the continuation of the 25 percent steel tariff and the 10 percent levy on aluminum imports.

"The Senate in Mexico is not going to take it up until the tariffs are off and the House of Commons in Canada is not going to take it up if it is not there soon after March 1 and it’s not going to be there unless the tariffs are off,” Grassley told reporters during his weekly conference call.

The United States ended exclusions from the tariffs in June 2018 for both countries during talks that led to the proposed agreement, which would replace the 1994 North American Free Trade Agreement if all three countries approve it.

The demand from both countries is just the latest hitch facing the trade agreement. Some congressional Democrats have raised the possibility of new talks to address their concerns about the enforcement of labor, environmental and prescription drug provisions.

The Trump administration imposed the metals tariffs on most trading partners in 2018 under Section 232 of the Trade Expansion Act of 1962, using a national security rationale.

However, it is unlikely the administration will send Congress the pact's implementing legislation before March 1 because congressionally mandated studies and reports won’t be ready by then, Grassley acknowledged.

The three countries have agreed that the United States take up the agreement first. Grassley said he expects Congress to receive implementing legislation sometime in the spring. He added that Canada needs to act on the trade pact before its lawmakers leave to campaign for re-election in the fall.

Grassley is sympathetic to the Canadian and Mexican positions. He and other lawmakers have called for ending the steel and aluminum tariffs on both countries.

“It’s very, very important that the White House get on board on doing away with these tariffs so we can get this thing not only before the Congress of the United States, but before the Senate in Mexico and the Parliament, House of Commons, in Canada,” Grassley said.

Grassley said officials in Canada and Mexico believe continued imposition of the tariffs is unfair.

“They believe, and I can understand their belief on this, that these aluminum and steel tariffs were put on to force Canada to the negotiating table,” Grassley said. “Canada went to the negotiating table so you can understand why Canada and Mexico want the tariffs off before they will enter it (the trade agreement) before the Senate in Mexico and before Canada will take it up.”

Grassley also said that Canada and Mexico are unwilling to renegotiate, which some Democrats say may be necessary to achieve changes they want.

"I can tell you visiting with the ambassador of Mexico last week and the foreign minister of Canada there is not going to be any reopening of negotiations,'' Grassley said. "Mexico's had their bellyful of these negotiations. They want to get something done."

He said he would be open to side letters or added agreements to the trade pact addressing areas of concerns by Democrats, but nothing that would require new negotiations.

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