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U.S., Canada Reach NAFTA Deal Ahead Of Midnight Deadline

Trilateral it is.

Back on August 27, Donald Trump convened a characteristically ridiculous media event to celebrate a new bilateral trade deal between Mexico and the U.S.

The timing was amusing and seemed clearly designed to distract from a veritable deluge of bad legal news. Seated in the Oval Office, the President attempted to conduct a live conference call with Enrique Pena Nieto and that went about like you’d expect. It’s worth briefly reliving that because it was straight out of a political sitcom:

Anyway, the problem with that deal is that it didn’t include Canada. Indeed, the whole point of moving ahead with Mexico was to essentially force the Canadians back to the negotiating table.

Prior to that call, Trump indicated he would rename NAFTA. “We’ll get rid of the NAFTA name [and] call it the U.S.-Mexico trade agreement”, he told reporters, adding that in his mind, NAFTA “has a bad connotation to it.”

The issue with all of that was that a NAFTA deal without Canada is likely to receive lukewarm (at best) support on Capitol Hill and so, the Trump administration spent the next several days trying to bully Canadian Foreign Minister Chrystia Freeland into getting on board.

Long story short, that didn’t work.

Things were already contentious enough, but any hope of a quick deal was dashed on August 31, when the Toronto Star got their hands on some off the record comments Trump made during his sweeping interview with Bloomberg. At one point, the President reportedly said this:

Here’s the problem. If I say no — the answer’s no. If I say no, then you’re going to put that, and it’s going to be so insulting they’re not going to be able to make a deal … I can’t kill these people.

Off the record, Canada’s working their ass off. And every time we have a problem with a point, I just put up a picture of a Chevrolet Impala.

Needless to say, Trump’s “Impala diplomacy” didn’t sit well with Canada and the very next day, the self-imposed deadline to get the Canadians on board with the bilateral Mexico deal expired.

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Things have been in flux since then, but over the course of this weekend, it became clear that Trump was finally close to cementing an agreement with Canada which would effectively seal the deal on a “new” NAFTA.

The above-mentioned Chrystia Freeland nixed a U.N. speech planned for Saturday, presumably to try and hammer out the remaining details. The loonie rallied in anticipation and is the strongest it’s been in over four months:

Loonie

The urgency to add Canada to the text of the deal with Mexico stems in part from Washington’s desire to get a trilateral deal done in time for Pena Nieto to sign off prior to passing the baton to Andres Manuel Lopez Obrador in December.

Trump has variously threatened to slap the Canadians with auto tariffs if they don’t relent and Canada has continually insisted that no amount of balderdash from the U.S. is going to compel them to sign a deal that isn’t in the best interests of the country’s people.

Apparently, Jared Kushner has been instrumental in keeping things on track amid the final push to resolve key sticking points, not the least of which is the prickly issue of access to Canada’s dairy markets (“local milk people“, I suppose).

That brings us to Sunday evening and finally, it looks like there is indeed a deal, albeit a provisional one.

Canada, Bloomberg reported at 10:20 PM ET, is “set to join the U.S. and Mexico in a tentative trade deal”.

Details are forthcoming (one assumes). For the time being, it looks like this was cobbled together for the sake of meeting the midnight deadline and the language appears to suggest that some issues aren’t yet set in stone. Regardless, this is obviously a big deal for the U.S. President.

Now we’ll all look forward to the awkward Trump/Trudeau conference call.


 

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2 comments on “U.S., Canada Reach NAFTA Deal Ahead Of Midnight Deadline

  1. It’s called the trilateral pump

  2. Futures look to be up pretty good so far this morning….apparently trading with Canada wasn’t priced in…

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