[CTC] Lighthizer: 'Fair amount of distance' remaining between U.S., Canada as time runs out

[Arthur Stamoulis]

INSIDE US TRADE
Lighthizer: 'Fair amount of distance' remaining between U.S., Canada as time runs out

September 25, 2018 at 12:27 PM
U.S. Trade Representative Robert Lighthizer on Tuesday said the U.S. and Canada must “come to grips” with a number of contentious issues -- such as dairy and Chapter 19 -- as the deadline for the U.S. to finalize a deal with Mexico approaches.

“I think Canada would like to be in the agreement, I think the U.S. would like them in the agreement but there is still a fair amount of distance between us,” Lighthizer said in New York <https://www.concordia.net/live/> on Sept. 25. “There are a number of significant issues between us,” he said.

“Canada wants to do it, I know we want to do it and we will see whether it happens,” he added. “We are sort of running out of time.”

The text of the U.S.-Mexico deal must be released by this weekend to ensure Mexican President Enrique Peña Nieto can sign a final pact before he leaves office later this year -- “which makes the most sense since he's the president that negotiated it,” Lighthizer said.

He contended that once Mexican president-elect Andrés Manuel López Obrador takes office, all bets are off, adding it would be “unfair to all the people that have been involved” to re-open negotiations.

“So, we have an agreement. The way that TPA works we didn’t really have any choice. If we push it beyond that day, then we have a renegotiation with López Obrador and we don't know where that would go at all. So, we have a good-faith negotiation, we have a fabulous outcome and we are going to go ahead with Mexico,” Lighthizer asserted.

An agreement that includes Canada would be optimal, he continued. However, the U.S. will move ahead this week no matter what Ottawa decides to do, Lighthizer insisted.

“If Canada comes along now that would be the best. If Canada comes along later then that's what'll happen. We certainly want an agreement with Canada,” he said, adding Canada had yet to “make concessions” in a number of key areas.

Earlier on Tuesday, Canadian Prime Minister Justin Trudeau said “there's a possibility” Canada could “build on” what the U.S. and Mexico agreed to, but maintained his government would continue to stand up for its interests.

“We are looking for the right deal, not just for Canada but for the U.S.,” he said at an event hosted by the Council on Foreign Relations in New York. “There’s no country in the world that has a greater vested interest in the U.S. doing well as Canada because we are so interlinked that we know that both of us can do well and we should do that.”

Lighthizer said Canada must compromise more in key areas if it wants to strike a deal.

“I get these ... people who say 'We really we want an agreement with Canada, oh and don't give on any of these provisions to Canada.' Well, I mean you are in one way or the other. The fact is that Canada is not making concessions in areas that we think are essential,” he said.

“There are areas where I have lots of [lawmakers] telling me -- and lots of business groups know -- that this is a once-every-20-year opportunity to correct protectionist things and make trade better and we have to take advantage of that,” he said.

But “you can't have it both ways,” Lighthizer said. “You can't say 'Oh, we absolutely have to have Canada. Oh and by the way, Canada has to give on a whole variety of things.' It's one way or another.”

Asked about the mood among lawmakers -- many of whom have said a final NAFTA deal must include Canada <https://insidetrade.com/node/164323> -- Lighthizer said “we are in a position where we want that too.”

“We are running out of time. If we can't get an agreement with Canada we are clearly not going to walk away from one with Mexico,” he asserted. “We are not going to say 'No deal because of Canada' -- that doesn’t make any sense at all.”

Ideally, he said, a deal can be struck with Canada, but “if not we will have to do it in a separate deal soon afterward -- if we can."

Asked for an update on whether Section 232 tariffs on Canadian steel and aluminum imports from Canada and Mexico could be lifted, Lighthizer said a decision would be made “when we get NAFTA done."

In July, Lighthizer told senators that a Section 232 “program” had to involve restrictions on all countries -- including allies like Mexico and Canada. “Resolving the NAFTA issue -- we would expect, or hope, that we would resolve the steel and the aluminum issues with both Mexico and Canada,” Lighthizer said on July 26.

On Tuesday, he said “at this point” the U.S. view is “we will turn to that at the next stage.”

“We started off originally trying to have some kind of an overall agreement that would accomplish [the removal of tariffs for Mexico and Canada],” he said. “When we get NAFTA done, which by the way the president is not going to call NAFTA, [he] will call it something else. When we get to that, then we will turn to [steel and aluminum].”

A source has told Inside U.S. Trade that Lighthizer informed Mexican Economy Secretary Ildefonso Guajardo, his counterpart in the NAFTA talks, that the Section 232 tariffs would be lifted once a U.S.-Mexico deal was inked, but the idea was “vetoed” by President Trump. Inside U.S. Trade reported last month that the U.S. was planning to replace the steel and aluminum tariffs with quotas <https://insidetrade.com/node/164186>. -- Isabelle Hoagland (ihoagland at iwpnews.com <mailto:ihoagland at iwpnews.com>)


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