Politics

Trump Announces Trade Pact with Mexico

Deal comes amid efforts to update NAFTA but excludes Canada

President Donald Trump and First Lady Melania Trump walk across the South Lawn to Marine One on July 27. (Sarah Silbiger/CQ Roll Call)

Updated 1:24 p.m. | President Donald Trump on Monday announced a trade deal with Mexico aimed at revamping parts of the North American Free Trade Agreement, but Canadian officials still must sign off on the pact.

The president hailed the preliminary pact as a “big deal” in a Monday morning tweet, but — at least for now — it does not include Canada. Trump said during an Oval Office announcement that the new pact would not be called NAFTA.

The president dubbed the pact the “United States-Mexico Trade Agreement,” saying he wants to do away with the NAFTA moniker because it carries negative connotations.

“It’s a big day for trade. It’s a big day for our country,” Trump told reporters.

The president indicated his administration and Mexican officials will try to sell their Canadian counterparts on the details, but left open the door to one-on-one deals with both countries.

“We’ll see if Canada can be part of deal,” he said, saying the U.S. might simply opt for new agreements with both its neighbors.

Trump predicted the new agreement will prove “very special for our manufacturers and our farmers” and “much more fair” than NAFTA. He also said talks with Canada have yet to begin.

“We made it much simpler, much better for both countries,” Trump said.

He took a jabs at the Canadian government, saying talks could move quickly “if they’d like to negotiate fairly” and again saying the “easiest thing we can do is tariff their cars coming in” to retaliate for its import fees on U.S. dairy products.

Trump campaigned hard on revamping America’s trade relationships with most of the rest of the world, at times singling out both Canada and Mexico for what he has dubbed “unfair” tactics. The president has threatened to scrap NAFTA if all three countries cannot agree on a new three-way agreement; if Canada opts out, Monday’s announcement could be a step toward a U.S.-Mexico deal. He long has said he favors trade pacts only between Washington and one other country.

U.S. Trade Representative Robert Lighthizer said NAFTA had “gotten out of whack” and “created big trade deficits,” something that long has irked Trump. On a midday call with reporters, he said administration officials “hope Canada can join” and predicted the - for now - two-country deal would lead to a “rebalancing” of the U.S.-Mexico trade relationship.

Lighthizer contended it will mean “more jobs for American workers and farmers, but also more workers and farmers from Mexico.” On automobile trade, the top U.S. trade representative said the new pact would put in place the “highest standards,” adding the same would be true for “intellectual property and digital trade and financial services.”

Lighthizer also said he is optimistic the trade pact will receive “overwhelming” bipartisan support, in part because of revised labor provisions that he sees as attractive to Democratic members.

“A lot of people thought we would never get here. Because we all negotiate tough. We do, so does Mexico,” Trump said, calling it a “really good deal for both countries.”

Trump, sitting behind the Resolute Desk in the Oval Office, attempted to take a phone call with Mexican President Enrique Peña Nieto to congratulate him on the agreement. But the scene quickly turned awkward as Trump was unable to find the right line with the awaiting Mexican leader.

He asked his staff to resolve the matter, and an aide rushed over and punched the proper button on one of the phones on Trump’s desk. The call finally was connected.

Trump’s trade policies are one of a small few that have led Republican lawmakers to publicly criticize him. Some GOP senators last month voted for a nonbinding measure that expressed support for congressional authority to review any move by the president to again impose tariffs for alleged national security reasons.

Oregon Democratic Sen. Jeff Merkley, a Foreign Relations Committee member, said lawmakers have yet to be briefed on the mini-deal’s specifics, saying in a statement that “it’s critical that any agreement include serious, enforceable labor and environmental standards to create a level playing field.”

On the same call, a senior administration official said it was only in the last few weeks that inking a two-way deal was viewed as the best next step in the NAFTA talks.

“It’s hard to have three people all have the light bulb go off at the same time,” the official said. “It’s not part of the strategy or anything. … I think this is a normal, orderly way to arrive at a deal with three people.”

On another trade matter, Trump said now “is not the right time” to talk with China about a new trade pact with the Asian giant. There are too many contentious issues between the two world economic powers to get anything done, he said.

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