The United States and Mexico have reached a preliminary trade deal. President Trump is refusing to call it a new NAFTA, but the deal is missing a key partner.
CGTN’s Roee Ruttenberg explains.
The United States and Mexico have reached a preliminary trade deal. U.S. President Donald Trump teased his news on Monday with a tweet, writing: “A big deal looking good with Mexico.” Then, hours later, in the Oval Office, Trump announced his first significant step to replace NAFTA—the 24-year-old free trade agreement with Canada and Mexico.
“I like to call this deal the United States-Mexico Trade Agreement,” Trump said. “I think it’s an elegant name. I think NAFTA has a lot of bad connotations for the United States, because it was a rip-off.”
NAFTA is the North American Free Trade Agreement. Missing from the deal is Canada, the third party in that trio.
Mexico’s outgoing President, Enrique Peña-Nieto, urged Trump to ensure Ottawa was on board. Trump, in turn, threatened Washington’s neighbor-to-the-North with tariffs on car imports if it didn’t agree to his terms. But Trump also said he would soon be speaking with Canadian Prime Minister Justin Trudeau. A spokesman for the Canadian foreign ministry said he was pleased that Canada’s NAFTA partners had worked out their differences. But gave little indication to where Canada stood in its own negotiations.
Canadian Foreign Minister, Chrystia Freeland, is expected in Washington on Tuesday for talks with American negotiators.
Still, many Trump supporters will see Monday’s announcement as a win in Trump’s divide-and-conquer strategy. The U.S. president prefers bilateral agreements over multilateral ones. Trump sought better terms for American carmakers. U.S. trade officials on Monday suggested he got exactly that from Mexico. And American manufacturers reacted positively to the news.
Trump-the-candidate, and then Trump-the-President, has often rallied his base by railing against NAFTA. Trump has frequently claimed the agreement sent American jobs south of the border, where labor is cheaper. But the deal also sent American goods with them. For example, government-subsidized U.S. corn largely decimated Mexico’s corn industry, thanks, in part, to NAFTA.
Mexico’s incoming foreign minister Marcelo Ebrard, who also stressed the need to include Canada, said this initial agreement was a good first step. “It encompasses the main worries mentioned by the president-elect’s team,” Ebrard said, “especially those related to the Mexican energy sector, the work and salary conditions of our workers and the maintenance of trilateral spaces for the solution of controversies, as well as the certainty in the medium term of the treaty.”
But the country’s incoming President – Andrés Manuel López Obrador, a populist on Mexico’s political left – has voiced caution about dealing with Trump … and trusting him. Which may explain why U.S. officials are rushing to get any deal through. The American Congress needs at least 90 days to review it. Lopez Obrador takes office on December 1. This three-month lead time leaves Canada with just a few days to join this deal. Or, the White House may be stuck starting over with a new President – and perhaps less-friendly partner – down South.