WASHINGTON – A day after President Donald Trump threatened to exclude Canada from a revised North American Free Trade Agreement, top Canadian officials raced to Washington and said they were moving “full steam ahead” to try to reach a compromise that could save the trilateral pact.
“This is a really big deal,” Chrystia Freeland, Canada’s foreign minister, said Tuesday after meeting with the U.S. trade representative. “We are encouraged by the progress that the U.S. and Mexico have made, particularly on cars and labor,” she said, adding that those concessions were “going to be valuable for workers in Canada and the United States.”
The last-ditch discussions come as Canada faces an ultimatum from the Trump administration, which has promised to ink a trade deal with Mexico in days and leave Canada from the pact. Freeland, who cut short a trip to Europe to fly to Washington, must now decide by Friday whether to join a revised pact that has been a source of contentious negotiations for a year or allow her country to be cast out of an agreement that has been critical to its economy.
“We will, as we have done throughout this negotiation, stand up for the Canadian national interest and for Canadian values while looking for areas where we can find a compromise,” she said, before heading to meet with Mexican officials.
Canada may have little choice but to sign on to the pact. Since NAFTA went into effect, various industries such as automakers and food suppliers have built coordinated supply chains across the continent. If those links are splintered by new trade agreements, “we’re clearly left off worse than we were before,” said Christopher Wilson, the deputy director of the Wilson Center’s Mexico Institute.
The effects would be especially severe for the global auto industry, which has built its supply chain around North America and relies on materials and components from Canada. Auto industry groups warned that a NAFTA without Canada would drive up prices for U.S. manufacturers and make them less competitive with foreign companies.
“It is imperative that a trilateral agreement be inked,” Jay Timmons, the president and chief executive of the National Association of Manufacturers, said in a statement.
Trump’s top trade advisers reiterated Tuesday that the United States was prepared to notify Congress of its intent to complete a deal with Mexico on Friday unless Canada quickly got on board.
“Well, this deal is pretty well put together with Mexico. So the president, as he’s indicated, is fully prepared to go ahead with or without Canada,” Wilbur Ross, the commerce secretary, said Tuesday. “We hope that Canada will come in.”