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About East Oregonian : E.O. (Pendleton, OR) 1888-current | View Entire Issue (Aug. 28, 2018)
NATION/WORLD Tuesday, August 28, 2018 East Oregonian Page 7A U.S. and Mexico tentatively set to replace NAFTA By PAUL WISEMAN, LUIS ALONSO LUGO and ROB GILLIES Associated Press WASHINGTON — Snubbing Canada, the Trump administration reached a pre- liminary deal Monday with Mexico to replace the North American Free Trade Agree- ment — a move that raised legal questions and threat- ened to disrupt the operations of companies that do busi- ness across the three-country trade bloc. President Donald Trump suggested that he might leave Canada, America’s No. 2 trading partner, out of a new agreement. He said he wanted to call the revamped trade pact “the United States-Mexico Trade Agree- ment” because, in his view, NAFTA had earned a rep- utation as being harmful to American workers. But first, he said, he would give Canada a chance to get back in — “if they’d like to negotiate fairly.” To inten- sify the pressure on Ottawa to agree to his terms, the pres- ident threatened to impose new taxes on Canadian auto imports. Canada’s NAFTA negoti- ator, Foreign Minister Chrys- tia Freeland, is cutting short a trip to Europe to fly to Wash- ington on Tuesday to try to restart talks. “We will only sign a new NAFTA that is good for Can- ada and good for the middle class,” said Adam Austen, a spokesman for Freeland, add- ing that “Canada’s signature is required.” “There is still a great deal of uncertainty — trepidation, nervousness — a feeling that we are on the outside look- ing in,” said Peter MacKay, a former Canadian minister of justice, defense and for- eign affairs who is now a partner at the law firm Baker McKenzie. Critics denounced the prospect of cutting Canada out of a North American trade AP Photo/Evan Vucci President Donald Trump talks on the phone with Mexican President Enrique Pena Ni- eto, in the Oval Office of the White House, Monday in Washington. Trump is announc- ing a trade “understanding” with Mexico that could lead to an overhaul of the North American Free Trade Agreement. Trump made the announcement Monday in the Oval Office, with Mexican President Enrique Pena Nieto joining by speakerphone. AP Photo/Luis Alonso Lugo United States Trade Representative Robert Lighthizer, front left, and Mexican Secretary of Economy Idelfon- so Guajardo, front right, walk to the White House on Monday. pact, in part because of the risks it could pose for com- panies involved in interna- tional trade. Many manufac- turers have built complex but vital supply chains that cross all three NAFTA borders. Trump was quick to pro- claim victory, though, point- ing to Monday’s surge in stock prices, which was fueled in part by the apparent breakthrough with Mexico. “We just signed a trade agreement with Mexico, and it’s a terrific agreement for everybody,” the president said. “It’s an agreement that a lot of people said couldn’t be done.” Trump has frequently condemned the 24-year- GoodHealth LIVE old NAFTA trade pact as a job-killing “disaster” for American workers. NAFTA reduced most trade barriers between the three countries. But the president and other critics say it encouraged U.S. manufacturers to move south of the border to exploit low- wage Mexican labor. The preliminary deal with Mexico might encour- age more manufacturing in the United States. Yet it is far from final. Even after being formally signed, it would have be ratified by lawmak- ers in each country. The U.S. Congress wouldn’t vote on it until next year — after November mid- term elections that could end Republican control of the House of Representatives. “There are still a lot of questions left to be answered,” MacKay said. He noted, for example, that Trump said nothing Monday about dropping U.S. tariffs on Mexican or Canadian steel — tariffs that were imposed, in part, to pressure those coun- tries to reach an agreement on NAFTA. But at least initially, it looks like at least a tenta- tive public-relations victory for Trump, the week after his former campaign man- ager was convicted on finan- cial crimes and his former personal attorney implicated him in hush money payments to two women who say they had affairs with Trump. Before the administra- tion began negotiating a new NAFTA a year ago, it noti- fied Congress that it was beginning talks with Can- ada and Mexico. So Mon- day’s announcement raises the question: Is it authorized to reach a deal with only one of those countries? A senior administration official, who briefed report- ers on condition of anonym- ity, said yes: The administra- tion can tell Congress it had reached a deal with Mexico — and that Canada is wel- come to join. But other analysts said the answer wasn’t clear: “It’s a question that has never been tested,” said Lori Wallach, director of the left-leaning Public Citizen’s Global Trade Watch. Even a key Trump ally, Rep. Kevin Brady, the Texas Republican who is chair- man of the House Ways and Means Committee, expressed caution about Monday’s apparent breakthrough. Brady said he looked for- ward “to carefully analyzing the details and consulting in the weeks ahead to determine whether the new proposal meets the trade priorities set out by Congress.” And the No. 2 Senate Republican, John Cornyn of Texas, while hailing Mon- day’s news as a “positive step,” said Canada needs to be party to a final deal. “A trilateral agreement is the best path forward,” Cornyn said, adding that mil- lions of jobs were at stake. And there are political rea- sons to keep Canada inside the regional bloc: “Mexico will have a dif- ficult time selling ‘Trump’s deal’ back home if Canada does not think it is a good deal,” said Daniel Ujczo, a trade attorney with Dickinson Wright PLLC. “It will appear that Mexico caved.” Indeed, Mexico has said it wants Canada included in a deal to replace NAFTA. But Foreign Minister Luis Videg- aray told reporters that “Mex- ico will have a free trade agreement regardless of the outcome” of U.S.-Canada negotiations. The Office of the U.S. Trade Representative said Monday that Mexico had agreed to ensure that 75 per- cent of automotive content be produced within the trade bloc (up from a current 62.5 percent) to receive duty-free benefits and that 40 percent to 45 percent be made by workers earning at least $16 an hour. Those changes are meant to encourage more auto production in the United States. For months, the talks were held up by the Trump admin- istration’s insistence on a “sunset clause”: A renego- tiated NAFTA would end after five years unless all three countries agreed to con- tinue it. Mexico and Canada considered that proposal a deal-killer. On Monday, the Trump administration and Mexico announced a compromise on that divisive issue: An overhauled NAFTA would remain in force for 16 years. After six years, the countries would review the agreement and decide whether it needed to be updated or changed. MCKAY CREEK ESTATES Are you worried about falling? 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