Canada and Mexico plot NAFTA plan
The apparent trade truce agreement between European Commission President Jean-Claude Juncker and U.S. President Donald Trump is good news for Canada, Foreign Affairs Minister Chrystia Freeland told reporters in a conference call from Mexico City.
The U.S. and the EU agreed to expand imports of U.S. liquefied natural gas and soybeans as well as lower tariffs on non-auto industrial goods on both sides. The U.S. and EU have also agreed to “hold off on other tariffs” while negotiations continue, said Juncker.
“I really commend everyone involved for pulling back from an action – if that is indeed what is happening – from pulling back from an action that not only is not justified and illegal under WTO and NAFTA rules but actually has the potential to be really devastating for the global economy,” Freeland said on the conference call shortly after the U.S.-EU announcement. “We need to look at [the agreement] more closely, but it sounds certainly like some positive news.”
Freeland is in Mexico with Finance Minister Bill Morneau and Jim Carr, Minister of International Trade Diversification, for meetings with Mexican president Enrique Peña Nieto, and Andrés Manuel López Obrador, Mexico’s president-elect.
“We share the goal with our European partners of moving forward from this situation where we have tit-for-tat tariffs,” Morneau said on the call.
The warmer tone between Trump and Juncker was in contrast to the chilly relations during the recent NATO meeting earlier in the month where Trump complained about his European allies and called the European Union “a foe” in an interview.
Canada welcomes stronger ties between the U.S. and Europe, said Freeland.
“We are very supportive of a strong partnership between the U.S. and the EU whether it is in our defense alliance, NATO or when it comes to economic issues.”
Freeland says now that the Mexico elections have concluded she hopes the NAFTA negotiations will move back “into high gear” as soon as they can.
However, the disagreement over a sunset clause to the agreement remains a sticking point – especially as the countries negotiate rules of origin requirements that could result in big changes for auto producers, she said.
With auto sector production cycles often stretching between five and 10 years, a sunset clause that creates built-in uncertainty would not be fair to carmakers, Freeland said.
“It would really run contrary to the spirit of NAFTA and the modernized NAFTA,” she said.