US Trade Representative Robert Lighthizer said the US is ready to move ahead with a new “NAFTA-style” agreement with or without Canada, according to news reports Tuesday. An agreement has already been reached with Mexico, but negotiations with Canada remain “at an impasse.”
“We're not going to say ‘no deal because of Canada.’ That doesn't make any sense at all,” Lighthizer said at a US Chamber of Commerce gathering. “We're certainly not going to give up. They're a huge trading partner of the United States. But we're going to have a high-standard deal, we're not going to have a low-standard deal.”
Lighthizer said the US is determined to sign the new agreement before Mexican President Enrique Pena Nieto leaves office Sept. 30.
“We're going to go ahead with Mexico,” Lighthizer said. “If Canada comes along, that would be best. If Canada comes along later, then that's what will happen. We certainly want to have an agreement with Canada.”
Lighthizer said Canada is “not making concessions” in essential areas. However, it is unclear whether the US can forge a new bilateral trade agreement to replace the trilateral agreement signed over 20 years ago.
Congress needs 90 days’ notification to approve a new NAFTA, and lawmakers have reportedly told the Trump administration that they will only sign onto a new NAFTA deal that includes all three North American nations. If Trump tries to withdraw from the deal entirely, the US would have to give Mexico and Canada six months’ notice.
Analysts across the economic spectrum have noted that ending NAFTA without a replacement would cause large-scale economic disruption across North America and beyond. Prices would increase sharply, with added costs passed onto consumers, and domestic producers would find their access to foreign markets diminished.
Some members of Congress have been public with their skepticism of a US-Mexico deal that excludes Canada. In a statement on his website, Senator Pat Toomey (R-Pennsylvania), said that a bilateral agreement with Mexico wouldn’t qualify under “fast-track” rules, which means it would require 60 Senate votes.
“NAFTA was a tri-party agreement only made operative with legislation enacted by Congress,” Toomey’s statement said. “Any change, such as NAFTA’s termination, would require additional legislation from Congress.”