Yves here. One detail: this article does not make clear that the incoming president of Mexico, Lopez Obrador, did not object to the current government finalizing a trade pact with the US. But perhaps he could tell it was unlikely to get done in time.
By Barkley Rosser, Professor of Economics at James Madison University in Harrisonburg, Virginia. Originally published at EconoSpeak
Nobody is calling it that, but the low key story on the back pages of today’s major papers report that this is what has happened, not to my surprise. September 29 (or maybe the 30th at a stretch) is the deadline for President Trump to submit to the Congress the final version of the US-Mexico trade deal if there is any chance of it being passed by the US Senate in time for outgoing Mexican President Pena Nieto to sign it on his lats day in office on November 30 after the outgoing Mexican parliament could approve of it. The US Senate rules are that there is a 90-day waiting period for the initial announcement of a trade deal and a 60 day waiting for delivering the final detailed agreement. The Trump administration got their initial report in on time, but with only it involving US and Mexico. Sept. 29 is the deadline for the final deal.
As noted in previous posts here (Aug. 29, econospeak.blogspot.com/2018/08/marrying-nafta-and-tpp-us-mexico-free.html and Sept. 6, econospeak.blogspot.com/2018/09/has-trump-gone-over-the-edge-on-negotiating.html , sorry having trouble providing the links), top Republican senators such as No. 2 John Cornyn of Texas and others have said they will not approve a deal that does not include Canada, a reformed NAFTA. Let me note that it was not impossible for this US-Mexico trade deal to form the basis of such a deal. But, unfortunately, in the immediate aftermath of the announcement of the US-Mexico deal Trump announced that Canada must settle the negotiation on “our terms.” Oh. The funny thing is that there was a possible deal. The US was making demands of Canada about the dairy industry (never a part of NAFTA because it was so hard to make a deal) and Canada was making demands about the lumber industry, generally described as a dispute over “dispute resolution.” There were other issues, but these were the politically hard and sensitive ones involving such places as Wisconsin and Quebec. In the end it appears that no deal between the US and Canada has been made and probably will not be made in time for the Sept. 29 deadline.
The newspaper reports provide zero details of the official negotiations, led by official US trade rep Robert Lighthizer on the US side, a hardline but experienced and knowledgeable official. All we have is that there is no deal between and the US and there will be no further official negotiations between now and the deadline of Sept. 29 or 30. We have just passed a last possible moment to save the US-Canada negotiation at the UN meeting (where the US president for the first time in history was laughed at while addressing the UN General Assembly filled with around 100 national leaders from around the world), actually two. One was a possible meeting between Lighthizer and Canadian Foreign Minister, Chyrsta Freeland, which might have happened on the sidelines of the UNGA meetings. I do not think that happened, and while she has in the US media been regularly identified as the Canadian opposite number of Lighthizer, she certainly was not the Canadian rep in the now failed negotiations, presumably somebody on the same level as Lighthizer (US SecState Pompeo is the opposite number of Freeland), whose name I have never seen reported.
But that meeting became completely irrelevant as there became a possible meeting at the same meeting (after Trump got laughed at) between Trump and Canadian PM Justin Trudeau. Trump very loudly and publicly declared that he would not meet with or speak with Trudeau, claiming that he did not like the Canadian ngotiating “style.” Really. In any case, any possible meeting between Lighthizer and Freeland was simply out the window. And, of course, this means there will be no agreement between the US and Canada prior to the Sept. 29 deadline.
According to the back page WaPo report today, despite this failure of getting an agreement with the US’s largest national export destination, the Trump admin will submit the current US-Mexican agreement without Canada (NAFTA minus Canada) to the US Senate (assuming that some not well-reported details of this agreement with Mexico have been resolved). I suppose there is a small chance that the Senate will accept it and that will be it. But based on previous statements by important Republican senators, this will not pass without Canada aboard, and while a few Dem senators (Sherrod Brown) have made supportive noises about Trump’s trade war, I doubt there will be enough to offset the loud GOP opposition, especially given that that United Autoworkers Union has come out against the agreement without Canada, joining in this with the US Chamber of Commerce and the US Business Roundtable.
It looks like the successor to NAFTA, if anything, will have to be renogiated from scratch with the incoming leftist Mexican president, Lopez Obrador, but Canada will have to be brought in, no matter what, or else involved will laugh very loudly at President Trump.