#NorthAmericanFreeTradeAgreement; #NAFTA; #ChrystiaFreeland; #IldefonsoGuajardo; #JustinTrudeau; #Americans'demandforasunsetclause; #RobertLighthizer; #DavidMacNaughton; #BrianClow
New York/Ottawa, May 18 (Canadian-Media): During participation in an armchair discussion at a luncheon given by the Economic Club of New York in New York on Thursday, May 17, Canada's Prime Minister Justin Trudeau had said, the three countries party to the North American Free Trade Agreement (NAFTA) trade pact haven't signed off on a new agreement because of the Americans' demand for a sunset clause, media reports said.
Justin Trudeau/Facebook page
The sunset clause, put on the table by the Americans, would reportedly force all three countries to proactively agree — every five years — that they will remain in the trade pact. If they do not agree, the deal will be automatically killed.
Adding sunset clause to NAFTA would mean the deal would have to be renegotiated every five years. It's something Canada and Mexico are very reluctant to agree to because of the economic shocks that come from uncertainty about NAFTA's future, U.S. Trade Representative Robert Lighthizer, who is negotiating for the Americans.
"We don't feel a deal with a sunset clause is much of a deal at all," Trudeau said.
Speaking on stage at an event at the Economic Club in New York today, Trudeau said the three countries are close to putting pen to paper on a renegotiated NAFTA and there is "a good deal on the table" right now — particularly for the automotive sector, an industry that accounts for a significant portion of cross-border North American trade.
"I'm confident in saying that we have found a proposal that is broadly acceptable to the three partners and our industries on the auto side of things," he said.
Despite sending a positive message on the state of negotiations, Trudeau's optimism on the auto file was later questioned by Ildefonso Guajardo, Mexico's economic minister.
"Congratulations @JustinTrudeau for a great interview at @EconClubNY - but a clarification is necessary: any renegotiated #NAFTA that implies losses of existing Mexican jobs is unacceptable," Guajardo said.
"Mexico has engaged constructively in the #NAFTA negotiations. Our proposals intend to rebalance 3-way trade by creating new business opportunities & jobs for Mexico, Canada, and the United States."
In a press conference after his luncheon Q&A, Trudeau acknowledged that nothing has been agreed to yet on the auto front.
"There are some very tangible proposals on the table including around auto proposals put forward by Canada and Mexico that are meaningful ... and line up with some of the longstanding bargaining positions of the U.S.," he said. "There are reasons to be cautiously optimistic."
The United States declared the NAFTA countries were nowhere close to a deal.
"The NAFTA countries are nowhere near close to a deal....There are gaping differences," U.S. trade czar Robert Lighthizer said in an evening statement.
"We of course will continue to engage in negotiations, and I look forward to working with my counterparts to secure the best possible deal for American farmers, ranchers, workers, and businesses."
All three countries agreed that they would keep negotiating beyond Thursday, a date that had been presented as a procedural deadline for getting a deal to the U.S. Congress for a vote this year.
Some fear delay will add political unpredictability, since many of the politicians now involved will no longer be in politics next year: Mexico will have a new administration, the U.S. will have a new Congress after midterm elections, and several senior American lawmakers are retiring.
Trudeau had spent the day promoting the idea that an agreement was now within reach.
"We are close to a deal," Trudeau said in New York. "We are down to a point where there is a good deal on the table...We'll keep working until they shut off the lights."
Top U.S. lawmaker Paul Ryan had declared Thursday as the last date for meeting the procedural deadlines for a vote this year.
On Thursday, he revised that slightly.
Ryan clarified that if the independent body in the U.S. tasked with analyzing trade deals managed to assess the new NAFTA faster than legally required, in theory, an agreement could still get to the floor for a vote in this Congress.
Bank of Canada, in the meantime said that trade uncertainty is hurting the economy, reducing business investment by about two percent and the overall gross domestic product by about 0.2 pe cent this year.
The tariff threats have further increased this uncertainty.