New NAFTA could be pushed back to until after U.S. election: Peter MacKay
U.S. President Donald Trump’s threat to impose escalating tariffs on Mexican imports could derail the new NAFTA trade deal, according to Peter MacKay, Canada’s former minister of foreign affairs.
“We could be in a situation where the free trade agreement falls apart in the eleventh hour,” Mackay told BNN Bloomberg in an interview Wednesday. “This is a potential breaking point that has catastrophic, far reaching implications when it comes to this free trade agreement.”
U.S. and Mexico representatives are meeting in Washington today to discuss threats by Trump to begin imposing a 5 per cent tariff on all Mexican imports starting next Monday if the Mexican government fails to take more aggressive actions to prevent migrants from crossing its territory on their way to the U.S.-Mexico border.
The tariffs jumps to 10 per cent on July 1 and then continue rising in five-percentage-point increments each month until it reaching 25 per cent on Oct. 1, according to a statement by the White House.
Trump made the surprise announcement just hours after the Mexican government announced it had sent the new NAFTA trade deal to the Mexican senate and the same day as U.S. President Mike Pence was in Ottawa to talk trade with Prime Minister Justin Trudeau.
MacKay worries that the timing of Trump’s announcement will make it much more difficult to get the deal ratified, he said.
“The invoking of these sanctions at the eleventh hour on Mexico has the potential to crater the deal because we are running out of runway in terms of the ratification,” he said.
If the deal is not ratified by the fall, the new NAFTA could get bogged down in electoral politics in both Canada and the U.S. and make it impossible move forward, said MacKay, who is now a partner at the Toronto law firm of Baker McKenzie.
Canada and Mexico have taken preliminary steps to ratify the deal. However, the deal could face stiff opposition from U.S. Democrats who want to deny Trump a political win, says MacKay.
“Getting free trade for North America through in this modernized form would be a big win for the President and I think there is reluctance in the House of Representatives on the part of the Democrats to let him have that shining moment,” he said.