By Jacob Pramuk, CNBC
Trade talks between the United States and Canada will kick off again Wednesday after the two sides ended Friday's tense negotiations without a deal.
President Donald Trump on Friday notified Congress that he wants to sign a trade agreement with Mexico, and potentially Canada in 90 days, the period legally required to review a deal, U.S. Trade Representative Robert Lighthizer said in a statement. The neighbors emerged from talks Friday, the White House's deadline for Canada to join in on a deal the U.S. struck with Mexico earlier in the week, without resolving sticking points.
"The talks were constructive, and we made progress. Our officials are continuing to work toward agreement," Lighthizer said.
Trump has sought to revise the three-nation trade agreement, which he says has punished American workers since it went into effect more than 20 years ago. The president has used tariffs on Canadian and Mexican goods to bring the countries to the negotiating table and wants them to drop their own barriers on certain products.
The White House is on track to provide text of a deal to revise NAFTA to Congress within 30 days, and Trump would aim to sign it 60 days after that, senior administration officials said Friday. They believe the administration would comply with the conditions for so-called fast-track trade authority, which would allow a deal to get through Congress more easily, even if Canada does not join in the deal. Some lawmakers are worried that a bilateral deal would not pass legal muster, according to Reuters.
The president's private comments, reported earlier by the Toronto Star, threw more uncertainty into the negotiating process at the last minute. In remarks to Bloomberg News reporters Thursday that the president wanted to be off the record, Trump said he would not make compromises in trade talks. Trump said that he would not publicly state his positions because "it's going to be so insulting they're not going to be able to make a deal," according to the Star report.
Speaking at an event in North Carolina on Friday afternoon, the president added that "it's just fine" if the U.S. does not make a deal with Canada. But he also tacked on a familiar threat to nudge Canada toward an agreement: tariffs.
"We just have to tariff those cars coming in. That's a lot of money coming into the coffers of the United States," he said.
After Friday's talks wrapped up, top Canadian trade negotiator Chrystia Freeland said that "with good will and flexibility on all sides, I know we can get" to a deal. But she stressed that Canada would not sign an agreement that it does not consider beneficial for its people.
"The government of Canada will not sign an agreement unless it's good for Canada and good for Canadians," she said.
The U.S. has focused in particular on Canada's agricultural policy, which Trump contends has unfairly curbed sales of U.S. dairy products there. He also aims to boost American farmers in Midwestern states who helped to propel him to the White House. Many of those farmers have taken a hit from the effects of the White House's mounting trade conflicts with China, Canada, Mexico and the European Union.
When asked about potential sticking points, including agriculture, the auto and pharmaceutical industries, Freeland said "we're not going to negotiate in public." Pressed on whether she could negotiate with the Trump administration after what the president said Thursday, she responded that she has worked with Lighthizer, who "has brought good faith and goodwill to the table."
In his official notification to Congress on Friday, the president outlined some of his goals for a trade agreement with Canada and Mexico, which he hopes to sign by the end of November. He contended that his administration has made progress toward a deal that "will help American farmers by ensuring fairer market conditions and improved market access" and "create a more level playing field for American workers."
"In short, this agreement is a great deal for the American people. It sets a new tone for all trade agreements, proof of the high standard that my Administration will require of any country entering a new trade agreement with the United States," the president wrote.
The timeline that the Trump administration set out would allow it sign a deal before new Mexican President Andres Manuel Lopez Obrador takes office on Dec. 1. He could call for different terms of a trade deal than the current administration.
The Trump administration currently seeks new trade deals with China and the European Union, as well as other countries around the world. The White House has tried to balance an exchange of tariffs with major trading partners — largely designed to promote negotiations — with a desire to come to new trade agreements.
The timeline that the Trump administration set out would put it on track to sign a deal before new Mexican President Andres Manuel Lopez Obrador takes office on Dec. 1.
U.S. lawmakers showed skepticism about the agreement.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, said he will evaluate any potential deal "to ensure that the agreement will maintain and improve access for American products and services to Canada and Mexico, as well as protect American innovation." The Finance Committee's ranking member, Democratic Sen. Ron Wyden of Oregon, contended that "it sure looks like the president is more concerned with announcing a deal during election season, rather than getting the best deal possible for American workers."
Sen. Rob Portman, R-Ohio, said he supports NAFTA renegotiation but "to truly make it work Canada, which is Ohio's number one trading partner, needs to be part of the final agreement." Sen. Patrick Leahy, D-Vt., said he "cannot support a trade agreement to replace NAFTA that does not include Canada, Vermont's biggest trade partner."
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