Well, this is awkward.
Facing a deadline of August 31 to produce a deal to renegotiate the North American Free Trade Agreement, President Donald Trump persuaded one of the two trading partners involved to sign on.
Mexico agreed to new terms of a deal early in the week. But Canada, um, didn’t. So Trump is moving forward anyway, notifying Congress, as required, that he plans to have the full text of a deal with both countries by the next deadline, which is 30 days from now.
You read that right. Trump is assuming Canada will attend the party even though it hasn’t accepted the invitation. And without Canada, it’s possible there can be no deal with Mexico, because of technicalities in U.S. law. So the NAFTA drama has actually intensified, with both Canada and the United States refusing to concede key points required to get to a deal.
This is partial good news that could turn out to be bad news. The Trump-o-meter for this week reads MEDIOCRE, our third best grade.
The good news is that Trump seems to have buried the hatchet with Mexico, refusing to insist, for example, that Mexico pay for his border wall as a condition of remaining in a free-trade deal with the U.S. There are problems with the Mexico deal, which, among other things, would probably raise the cost of automobiles sold in the U.S. But it reopens pathways for tariff-free exports of U.S. agricultural products to Mexico, and is far better than no deal at all. So, OK.
Canada is taking a harder line. America’s biggest trading partner reportedly insists on maintaining protections for its dairy industry, which is politically powerful within Canada. Trump won’t back down. So there’s no deal with Canada, even though both sides say they’ll continue talking.
As the clock ticks, Canada’s leverage may strengthen, since Trump may need a deal more than Canada does. Congress must pass legislation approving any new version of NAFTA Trump negotiates, and federal law authorizes Congress to approve a three-way deal by simple majority. If it’s not a three-way deal, approval would require 60 votes in the Senate, which is 10 more than the Republcian majority at the moment. So if Democrats want to kill Trump’s revised deal, they could.
That’s if the current Congress votes on the deal. An actual vote wouldn’t occur for at least 90 days from today, which means a lame-duck Congress would be voting on the bill. If Democrats gain control of either House of Congress in the November midterms, that could change the entire outlook for a NAFTA 2.0. And Trump wants to get the whole thing done before current Mexican president leaves office on Nov. 30. The incoming president won’t necessarily agree to the same deal.
So Trump now has to thread a needle to get his deal. And possibly make some concessions to get Canada on board. He’ll never admit that, but it might be the wise — and necessary — thing to do.
- Why the Manafort verdict should worry Trump
- Here’s the risk for Trump in Michael Cohen’s guilty plea
- How to help Trump win his trade wars
- Some Republican approve of Russia’s help in elections
- Socialists are coming for the Democratic party
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman