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Trump says he’ll end NAFTA; strikes deal with Mexico alone

Author: Marianne Goodland - August 27, 2018 - Updated: August 27, 2018

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NAFTACanada’s chief NAFTA negotiator Steve Verheul talks to reporters following a roundtable with labour leaders in Ottawa last month. (Photo by Sean Kilpatrick/The Canadian Press via the AP)

President Donald Trump announced Monday he would end the North American Free Trade Agreement, adding that he has struck a new trade deal with Mexico. But where that leaves Canada, the third partner in NAFTA and Colorado’s top market for beef exports, is up in the air.

In an announcement from the White House Monday, Trump said there would be a stand-alone deal between the United States and Mexico, to be known as the “United States-Mexico Trade Agreement.”

Details of the trade agreement have not yet been released, although it is believed to focus on automobile manufacturing.

The agreement with Mexico ends more than a year of negotiations over the future of NAFTA, a signature talking point for Trump on the campaign trail. He has referred to NAFTA as “the worst trade deal ever.”

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But Trump’s announcement Monday raised questions about what happens with Canada, the third partner in the former NAFTA arrangement.

Commissioner of Agriculture Don Brown told Colorado Politics Monday that the sticking points between the United States and Canada have to do with imports of milk and especially wheat. Brown said Canada grades U.S. wheat much tougher than it does its own, he said.

The Washington Post reported that a signed deal with Mexico would start a 90-day clock for Congressional for confirmation. That deal would need to be in place by the end of the week in order to get it into the hands of Mexico’s current president, Enrique Peña Nieto, who he leaves office on Nov. 30. Neito’s successor, Andrés Manuel López Obrador, is viewed as less sympathetic to U.S. interests, especially on oil and gas deals, and may want an opportunity to review the deal himself.

Such a tight timeline has led some trade experts to state that Canada is unlikely to have enough time to review and sign off on a similar deal by the end of the week. Nieto, however, tweeted out shortly after a phone conversation with the Trump that he hoped Canada would be willing to join in the deal this week.

Translation: “I spoke to the Prime Minister of Canada Trudeau about the status of the NAFTA negotiations and the advance between Mexico and the US. I expressed the importance of his reinstatement in the process, in order to conclude a trilateral negotiation this week.”

U.S. Secretary of Agriculture Sonny Perdue, in a statement issued Monday, said the “agreement specifically addresses agricultural biotechnology to keep up with 21st Century innovations. And we mutually pledge to work together with Mexico to reduce trade-distorting policies, increase transparency, and ensure non-discriminatory treatment in grading of agricultural products.”

Perdue called the agreement a “great victory for farmers and ranchers, because locking in our access to Mexican markets is critical to supporting farm income and strengthening rural communities. Mexico has historically been a great customer and partner, and we are happy to have this resolved for our agricultural producers.”

He concluded that he hoped Canada “will see the need to settle all of the outstanding issues between our two nations as well, and restore us to a true North American Free Trade Agreement.”

The announcement was viewed as good news by soybean farmers hit hard by tariffs from China, retaliation against the United States because of tariffs imposed by the Trump administration on Chinese exports.

American Soybean Association (ASA) President John Heisdorffer said Monday that “We need NAFTA and new free trade agreements to build and ensure the certainty of our markets for soy and livestock product exports. Approval of NAFTA would be a big step in the right direction for us, with the uncertainty and market loss resulting from China’s tariff on U.S. soybeans. We are hopeful that a new NAFTA agreement will set the tone for more trade agreements to come.”

Marianne Goodland

Marianne Goodland

Marianne Goodland is the chief legislative reporter for Colorado Politics. She's covered the Colorado General Assembly for 20 years, starting off in 1998 with the Silver & Gold Record, the editorially-independent newspaper at CU that was shuttered in 2009. She also writes for six rural newspapers in northeastern Colorado. Marianne specializes in rural issues, agriculture, water and, during election season, campaign finance. In her free time (ha!) she lives in Lakewood with her husband, Jeff; a cantankerous Shih-Tzu named Sophie; and Gunther the cat. She is also an award-winning professional harpist.