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WASHINGTON – Prime Minister Justin Trudeau of Canada made a call this week to Mexico's President-elect Andrés Manuel López Obrador to help save a North American free trade agreement with Mexico in three countries.
The phone conversation between the two leaders, which took place on Thursday, took place while the United States and Mexico were preparing to release the text of the trade agreement reached last month, which excludes the Canada. The White House had set Sunday the deadline for handing the text of the agreement to Congress and was to publish the details this weekend. Relatives of the talks said the situation remains unstable and talks between the three countries are expected to continue over the weekend.
Mr. Trudeau's openness comes at a difficult time between the United States and Canada, when President Trump threatens to leave Canada at the age of 25 and tax his cars for not accepting the commercial demands of the United States. United States. .
Mr. López Obrador, addressing reporters on Friday, said that Mr. Trudeau had asked him "to intervene to get the United States to hear" and that he had agreed to help.
"Of course, we want to have good relations with Canada and good relations with the United States," said López Obrador.
According to a negotiator, Mexico's Foreign Minister Luis Videgaray Caso is working to bring the United States closer to Canada. The conversations were described as intense.
It is unclear whether the United States and Canada can overcome the differences that have hitherto hindered an agreement. And Mr López Obrador said that he had no plans to reopen the trade pact that Mexico, under the leadership of Enrique Peña Nieto, had concluded last month.
"We do not want to compromise our economic future, our financial stability. We want there to be investment in Mexico for there to be jobs, "he said. "That's why we will not reopen the agreement, the agreement with the United States. We have already concluded this case.
He added: "I told him we would insist that the treaty be trilateral".
In a statement released on Friday, Trudeau's office said the prime minister and president-elect "agreed to work closely together to strengthen the dynamic partnership between Canada and Mexico," and discussed Nafta and the economic and social benefits. commercial relationship between our two countries. "
A spokesman for the US Trade Representative's office declined to comment. At a UN summit meeting in New York this week, Trump said he had rejected a meeting with Trudeau, whom the prime minister said he had never asked for.
The September 30 deadline is fueled by political considerations in the United States and Mexico. Mr. Trump and Mr. Peña Nieto want to sign the pact before November 30, before the new Mexican administration takes over and before a potential change of control of the United States Congress.
But the deal faces an uncertain fate without Canada. Lawmakers have urged the White House to continue working to maintain a trilateral pact that has become critical for automakers, farmers and other businesses in North America.
The publication of the text does not prevent Canada from joining the agreement, but to do this, the United States and Canada must resolve some of the problems that have hitherto prevented an agreement from being reached. .
Many of the most significant changes to Nafta relate to the rules governing the manufacture of cars, which are being modified to bring more car production back to the United States from Mexico.
The August preliminary agreement required that at least 75% of the value of a car be produced in North America for a company to be able to import duty-free into the United States. This represents a 62.5% increase over the original Nafta.
Car manufacturers would also be required to use more local steel, aluminum, glass and other parts. In addition, 40 to 45 percent of vehicles should be made by workers earning at least $ 16 an hour. This increase is aimed at increasing employment in the United States and Canada, where wages are higher.
These changes are generally acceptable to Canada, but they remain reluctant to expand access to the Canadian dairy market and to abandon an independent tariff dispute settlement system. Mexico agreed to postpone talks on the removal of Trump's tariffs on steel and aluminum imports, but Canadian negotiators argued that they should be lifted as part of a new package. agreement with Nafta.
Robert E. Lighthizer, chief negotiator for the Trump administration, told lawmakers this week that talks with Canada would continue even after the release of the deal with Mexico. Administration officials hope Canada will be more willing to make concessions after the provincial election in October. Minor changes to the text may be made after publication and even after signature.
"Republicans and Democrats of Finance and Ways and Means will analyze this carefully and look for ways to advance an agreement on three countries," said Friday the representative of Texas, the Republican Chair of the House Ways and Means Committee , Kevin Brady. .
He added: "I hope Canada will progress and come to the table in a meaningful way."
Business groups also expressed concern about the conclusion of a free trade agreement that does not include Canada.
"If Canada does not enter the market, there is no agreement," said Thomas Donohue, the president of the American Chamber of Commerce, last week. The Business Roundtable, a lobbying group that represents leaders of major US companies, echoed these concerns. "Our ally in the North is key to enabling trade to strengthen the US economy," said the group.
Relations between the governments of the United States and Canada have fallen to their lowest level of recent memory, leaving open the possibility that no agreement will be reached soon. Trump said this week he was frustrated with the way Canada acted during the negotiations and promised that he would be just as happy to collect tariffs on imports of Canadian cars. States.
After imposing tariffs on steel and aluminum imports against the will of the companies, Trump does not seem to be putting a lot of things at their disposal.
"You have to believe when he threatens to do it with cars that he could, even if it would be incredibly painful for Americans," said Chad Bown, a member of the Peterson Institute for the Economy. international.
Preserving a healthy business relationship with the United States is critical to Canada's economy, but many of them support Trudeau's strong stance on Mr. Trump's threats.
"If Trudeau had given in to a variety of issues, it would have been politically indefensible in Canada," said Lawrence Herman, a lawyer specializing in international trade in Ottawa.
For months, Canadians have been following the Nafta negotiations with the sustained attention normally reserved for the playoffs. Nearly three-quarters of Canada's exports cross the border. But the prospect of a 25% tariff on auto and auto parts exports to the United States, which Trump has threatened, is more worrying for the Canadian economy than a Nafta end.
It would paralyze Canada's largest manufacturing sector, which predicts 250,000 people are out of work. It would also cast a shadow over Mr. Trudeau's government, which must be re-elected in a year.
"It can only hurt the Prime Minister," said Janice Stein, founding director of Munk University at the University of Toronto. "If that happened, once you pull down the rates, it's not easy to reduce them."
Stein, however, remains optimistic about reaching an agreement between negotiators in the next 10 days. "Everyone knows what's at stake," she said.
Catherine Porter contributed to the report from Toronto and Elisabeth Malkin from Mexico City.
