President Donald Trump’s effort to force Canada into signing on to a new NAFTA on his terms is facing new hurdles thanks to growing opposition at home to his threat to proceed without the U.S.’s northern neighbor.
Trump’s frustration spilled into the open over the holiday weekend as he railed against Canada on Twitter — as well as its many supporters in both political parties. The president has threatened to leave Canada out of a new trade deal already negotiated with Mexico, but without congressional support he lacks leverage to force Ottawa to make concessions in talks that are due to resume Wednesday.
“There’s going to be a lot of pressure to get a deal with Canada,” Mark Sobel, a former U.S. Treasury official...“Canada’s the main trading partner for many states, quite a bit of our economic fortunes are entwined with Canada.”...
...Trump began his Labor Day holiday... by attacking Richard Trumka, the head of the AFL-CIO, America’s largest union umbrella group, who said on “Fox News Sunday” that “it’s pretty hard to see” how NAFTA works without Canada. Trump had hoped unions would lean on Democrats to back his approach...
The debate over how and whether to include Canada in a new NAFTA that must be ratified by Congress illustrates Trump’s political isolation in his trade wars...
Both Canadian and U.S. negotiators insist they have been making progress with talks due to resume Wednesday. But they have also bogged down over sensitive issues related to Canada’s highly protected dairy sector and the Trump administration’s zeal to eliminate a dispute-resolution mechanism that Ottawa regards as crucial...
Despite Friday’s deadline passing without a deal, both Canadian and U.S. officials insist that Canada could still meet an end-of-September procedural deadline set by Congress. Under congressional rules for passing trade agreements the administration must publicly release text of the agreement 60 days before any signing, meaning wrapping up the US-Canada negotiations before then could put things back on track...
The problem for Trump is that U.S. business and farm groups as well as a broad bipartisan swath of legislators say they will oppose any deal that doesn’t include Canada. If the AFL-CIO’s opposition to a NAFTA without Canada holds, it would leave Trump facing opposition by bosses, farmers, workers and politicians — every major constituency in American trade politics...
This was excerpted from 4 September 2018 edition of the Financial Post.