The fourth round of negotiations on NAFTA are getting underway
Trump pledged to end or renegotiate NAFTA during the 2016 campaign
Trump administration negotiators are bringing an aggressive position on trade to the North America Free Trade Agreement negotiating table, demanding several provisions that some worry will sink the deal and give President Donald Trump a reason to scrap the agreement entirely, business leaders and sources with knowledge of the proceedings tell CNN,
With the fourth round of negotiations on NAFTA getting underway and Canadian Prime Minister Justin Trudeau meeting Trump at the White House on Wednesday, sources say the Trump administration will propose tightening rules on the origins of car parts, push to implement a sunset provision on the deal and urge an end to the process used to resolve conflicts between nations and businesses.
White House aides declined to confirm that these proposals were on the table, noting that negotiations are far from over, but representatives from the business community are worried that such demands will make it impossible for Mexico and Canada to agree to a revamped deal. If they walk away, sources say, the lack of an agreement could give Trump a reason to end the trade deal entirely.
Tom Donohue, president of the US Chamber of Commerce, said on Tuesday in Mexico City that he worried about the “several poison pill proposals still on the table that could doom the entire deal.”
Negotiators led by United States Trade Representative Robert Lighthizer, Donohue said, have pushed for a sunset clause that would allow any country to terminate the deal after five years and tighten rules on where parts that eventually go into finished products can be purchased.
The Chamber of Commerce, a reliably Republican organization, has vehemently opposed significant changes to NAFTA, leading a public campaign against any changes. That position puts the group at odds with the Republican President, setting up a showdown between the heavyweight political group and the White House.
“All of these proposals,” Donohue said in Mexico, “are unnecessary and unacceptable.”
Trudeau and Trump did not have a traditional press conference when the Canadian Prime Minister visits the White House on Wednesday. But the two did speak briefly with reporters before their formal meeting in the Oval Office, which Trump said would include a discussion about the trade deal.
“If we cannot make a deal, it will be terminated and that will be fine,” Trump said about NAFTA, nodding to his belief that the United States and Canada will look out for their best interests and help each other when they can.
Trudeau also spoke about NAFTA during a meeting with members of the House Ways and Means Committee on Wednesday morning, telling reporters that while there may be small issues, the larger US-Canada relationship is what matters.
“The relationship between Canada and the United State is unlike the relationship between any other countries anywhere in the world,” Trudeau said. “Overall with the little challenges that come up, we will be able to talk through and work through, but the overall picture is what we can’t lose sight of.”
NAFTA, implemented by former President Bill Clinton in 1994, has drawn considerable political ire in recent years because of working class job losses, many of which have been blamed on free trade. Trump pledged to end or renegotiate NAFTA during the 2016 campaign, using the plan to invigorate working class voters in Michigan, Ohio and Wisconsin.
“Personally, I don’t think we can make a deal because we have been so badly taken advantage of,” Trump said in Arizona earlier this year. “I think we’ll end up probably terminating NAFTA at some point.”
Trump, though, agreed not to immediately terminate the deal shortly after taking office and instead entered negotiations with Canada and Mexico.
Ending NAFTA would be a “pretty big shock to the system,” he said at the time, but warned that it still could happen.
By demanding too much in negotiations, business leaders like Donohue think Trump will eventually get what he wants and be able to blame Mexico and Canada for walking away.
Possible changes to NAFTA have worried even pro-Trump voters and groups. According to the American Farm Bureau, a group that is leading a campaign against NAFTA changes, agriculture exports have increased from $8.9 billion in 1993 to $38.1 billion in 2016 because of NAFTA.
And some farmers who voted for Trump have publicly worried the man they voted for could hurt their business by toying with NAFTA.
“Trade got a bad rap in the campaign,” Bob Hemseath, an Iowa corn farmer, told CNN earlier this year. “Mexico is extremely important to my farm and to corn farmers in general because they are one of our top consumers of corn. It is very important to have access to the market.”
White House press secretary Sarah Sanders dodged questions about NAFTA on Tuesday.
“The President wants to continue the conversation. But the President’s ultimate goal is to make sure that we get the best deal for Americans as possible, and certainly for American workers,” she said. “He’s been clear that he doesn’t think the current structure is a good one, and he wants a better deal.”