A trio of top U.S. business groups said it would be “unacceptable” to sideline Canada in any trade agreement that seeks to increase jobs and enhance the competitiveness of businesses across the United States.
In a letter sent Monday to U.S. Trade Rep. Robert Lighthizer, the heads of the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers applauded the “constructive” work done so far with Mexico to improve and modernize the North American Free Trade Agreement (NAFTA) in ways that “expand trade, reduce trade barriers and maximize economic opportunities.”
The groups, however, urged officials to come to a final resolution that also included Canada, the largest U.S. export market in the world. “American workers and families need an agreement that includes all three North American economies,” the trio of business groups said.
Negotiators also were urged to ensure any trade agreement was appropriately enforceable, indicating in their letter that any rulings of new NAFTA state-to-state dispute settlement panels should not be “merely advisory.” The agreement’s investment protections -- as enforced by investor-state dispute settlement -- also should not be diluted and should be available to all investors, according to the letter.
The business groups also sought to do away with an automatic sunset clause that could lead to terminating the agreement unless all parties “opt in” to extend the agreement after a review every six years. Instead, the groups encouraged officials to pursue a new approach, or at the very least, replace the requirement with an “opt-out” provision.
Negotiators also were urged to exclude new and higher tariffs within North America, citing reports of a “side letter” with Mexico suggesting the potential imposition of quotas or tariffs on auto and auto parts imports from that country would remain in place indefinitely. The leaders also sought to expand U.S. firms’ access to government procurement markets in Canada and Mexico, rather than the U.S. “dollar for dollar” proposal that has caused concern that a new NAFTA would limit access to these markets.
President Trump last month announced he had a new trade agreement on the table with Mexico. However, the deal for the United States-Mexico Trade Agreement, as Trump called it, remains tentative. Canada, which for now is not part of the proposed agreement, had taken a prolonged raincheck of several weeks from the renegotiation talks.
Lighthizer has indicated that every effort would be made to include Canada, even if it takes longer than the deadline. Mexico also has made clear it wants Canada included in the agreement.
In a sign of growing frustration, however, House Majority Whip Steve Scalise (R-LA) on Tuesday threatened congressional action against Canada if it doesn’t “cooperate in the negotiations” to rewrite NAFTA. In a statement on his website, Scalise said now that the Trump administration has completed a new trade deal with Mexico, and continues negotiations on a better agreement with Canada, “there is a growing frustration with many in Congress regarding Canada’s negotiating tactics.
“Members are concerned that Canada does not seem to be ready or willing to make the concessions that are necessary for a fair and high-standard agreement.”
While all members of Congress would like to see Canada remain part of the three-country coalition, “there is not an unlimited amount of time for it to be part of this new agreement,” Scalise said. As such, Congress intends to fully enforce the deadlines established in the Bipartisan Congressional Trade Priorities and Accountability Act (TPA).
“Mexico negotiated in good faith and in a timely manner, and if Canada does not cooperate in the negotiations, Congress will have no choice but to consider options about how best to move forward and stand up for American workers,” Scalise said.
The latest monthly Energy Information Administration data on the origins of U.S. crude oil imports show that only one country -- Canada -- exported more than 1 million b/d to the United States in June 2018. The top five sources of U.S. crude oil imports for June were Canada (4.0 million b/d), Saudi Arabia (835,000 b/d), Mexico (833,000 b/d), Venezuela (552,000 b/d) and Iraq (421,000 b/d).
Canada also remained the largest exporter of total petroleum to the United States in June, exporting 4.5 million b/d. The second largest exporter of total petroleum was Mexico with 876,000 b/d, EIA said. The country also exported 226,624 MMcf of natural gas to the United States in June.