NAFTA talks resume as questions grow about Trump's ability to deliver

Canada returns to the NAFTA table in Washington Wednesday after a four-day break in negotiations that appeared to be pretty stressful ...for the American side.

The Trump administration's failure to securea deal before last Friday wasn't well-received by key voices in Congress, where NAFTA's fate ultimately will be decided.

Bythe end of the weekend, the White House seemed to have fallen out with an ally it had hoped would back a revised NAFTA:a union representing millions of working-class Americans, nowsouring on President Donald Trump'sability to deliver.

"We are looking forward to constructive conversations today," she said before heading to the offices of U.S. Trade RepresentativeRobertLighthizer.

As talks resume, the priority to-do list sits right where it was on Friday afternoon:

• UpdateNAFTA'sdispute settlement chapters in ways that are bothconsistent and comfortable for all three partners;
• Bridge the gap between what Donald Trump wants and what Canada is prepared to give from the supply-managed agriculture sectors;
• Address nagging Canadian concerns about protections for cultural industries;
• Figure out how many of the concessions Mexico made to the U.S. on intellectual property are also acceptable to Canada.

Freshsigns of perceived weakness in Washington maybolster Canada's determination to rejecta bad deal, as Prime Minister Justin Trudeau hasvowed publicly to do. Trudeau's team spent theweekend talking to stakeholders and advisers to prepare for this week.

Trudeau on Chapter 19, culture in NAFTA talks

6 years ago

Duration 1:37

Prime Minister Justin Trudeau says Canada will stand firm on protecting Canada's cultural sectors and dispute resolution mechanisms during NAFTA talks.

The toneFreeland set early in her public statements duringthe negotiations ano-drama approach of working"intensely" and "constructively" and praising the "goodwill" of counterparts seems to be holding firm.

Work continues to finalize the text before the next Congressional deadline at the end of the month. If all three parties remain serious about a signing ceremony before Mexico's government changes handsDec.1, thenegotiated text is due by Sept. 30.

Congress is the 'final arbiter'

The pressure on the negotiating teams continues. But sinceFriday'snotification to Congress leaves the door open to a trilateral agreement, all sides have several weeksto work deliberately through the sticking points.

At the moment, the Americans may be facing more heat than those on the Canadian side. Trudeau's government won't face voters for a year, while Republicans are staring down a particularly difficult midterms season.

During alate Friday briefing by U.S. officials, a reporter pressed for details on why the U.S. Trade Representative's office believed Congress could approve a deal without Canada essentially failing to deliver the kind of trilateral agreement Congress authorized the USTRto renegotiate.

Officials said that, in the USTR's view, it should be possible to drop a country from a multilateral negotiation if its demands can't be met.

However, the official acknowledged that Congress isthe final arbiter of how (and if) trade deals get passed.

That didn't stop Trump from warningCongress "not to interfere" in the negotiations, part ofa series of tweets issued Saturday morning asthe late Senator John McCain'sfuneral unfoldedan event to which Trumpwas not invited.

RosaDeLauro, a congresswoman key to mobilizing Democraticvoices against trade agreements like the Trans-Pacific Partnership, said in a statement late Friday that "Canada must be a party to the final deal. A deal between the United States and Mexico is not good enough."

Rep. Richard Neal, who could assume the chair of the powerful House Ways and Means committeeif Democrats win control of the House in November, said the outcomeof the last year ofNAFTAnegotiations had amounted to "little more than re-arranging the deck chairs on the Titanic."

Representatives of Trump's own party are also concerned about the way things are going.

Republican senators like PatToomeycontinue to warn the Trump administration to not attempt to use the trade authority delegated to it for a deal unless it includes Canada.

Automotive math requires three countries

Bipartisan legislation stands at the ready to limit Trump's trade powers should he try to go beyond what a critical mass of Congress is comfortable with by imposing national security tariffs on automobiles, for example,or by issuing an executive order to withdraw fromNAFTAaltogether.

Trump's Commerce SecretaryWilbur Rossconfirmed a week ago it's most likely that the next Congress the one set to be elected in November's midterm elections will be the one to vote onNAFTA'srewrite, not the current mix of legislators.

So Lighthizer has to not only come up with a deal that his boss wants(no easy task)but one a hypothetical future mix of Democrats and Republicans could support.

Analysts noted over the weekendthat the automotive chapter breakthrough previewed in Monday'spreliminary agreement with Mexico is premised on preserving supply chains across three countries, not two.

The math for the new rules of origin may not work without Canada. For theCanadian side, that's leverage.

Hurt outpacing help for workers, says union

On Fox News Sunday (a television program prone to flattering coverage of the Trump administration), Richard Trumka, the head of the American Federation of Labour and Congress of Industrial Organizations (AFLCIO), said the supply chains across Mexico and Canada are so integrated that it's pretty hard to see how NAFTAcould be replaced by a deal that doesn't include Canada.

Trumka said his federation which represents over 12.5 million working class Americans, including thosein manufacturing-heavy districtsthat Republicans need to succeed is anxious to move forward with an agreement that includes all three countries.

Trumkapointed out that, whilethe Trump administration has so far failed to land a three-nation deal, it continues to pursue ahigh-tarifftrade strategy which is hiking the price of both intermediate components and final consumer goods,triggering layoffs.

"Unfortunately, to date, the things that [Trump]has done to hurt workers outpace what he's done to help workers," he said.

Undeterred, Trump tweeted on Labour Day Monday that Trumka"represented his union poorly on television" and workers in America were doing "better than ever before."

Behind the scenes, Trump cancelled a scheduled outingand spent his Labour Day making phone calls that were about trade, according to White House spokesperson Sarah Huckabee Sanders.

So who took the president's calls? It's unclear. It doesn't seem in his nature to ask for help but he may need it.