WASHINGTON — A number of pro-trade American lawmakers had lunch with U.S. President Donald Trump on Tuesday as they ramped up the political campaign to prevent him from blowing up NAFTA.
Trump met at the White House with senior staff and a half-dozen Republican senators, who urged him not to start cancelling NAFTA, which Trump has threatened to do as a bargaining tactic.
Tuesday’s gathering came after a similar meeting in which U.S. auto companies took their concerns to Vice-President Mike Pence. They are frustrated with auto proposals the Trump team has put on the negotiating table and dozens of lawmakers recently echoed their concerns in a public letter.
The U.S. auto proposal demands that all cars have 85 per cent North American content and 50 per cent content specifically from the U.S., to avoid a tariff — with almost no grace period for a phase-in.
Auto-industry representatives have said the proposal is so unrealistic it will just prompt the industry to ignore North American rules, produce elsewhere and pay the import tariffs.
Canadian officials at the last negotiating round offered no major counter-proposals — in fact, on the auto issue, they essentially delivered a presentation suggesting the United States would hurt itself with its plan.
Canada's chief negotiator Steve Verheul told a parliamentary hearing this week that Canada wants to offer constructive counter-proposals, but is wary of engaging on some terms presented by the U.S. side.
Trump has threatened to begin the NAFTA withdrawal process as a way to put pressure on the other parties. However, some American lawmakers, especially from agriculture-exporting states, have pleaded with him not to make moves that might destabilize their markets.
States that rely heavily on agriculture have voiced concerns similar to those of the auto sector.
One of the senators present at Tuesday's meeting, Iowa's Joni Ernst, said she raised her concerns with the president and with U.S. trade czar Robert Lighthizer.
"Today, I stressed to [them] the importance of maintaining NAFTA and the duty-free access our [agriculture] products enjoy under it," Ernst said in a statement later.
"Trade plays a critical role in Iowa's economy and I reiterated to the administration the importance of ensuring Iowans remain competitive in the global market — provided our trading partners are operating on a level playing field.
"I will continue working to ensure that any changes made to NAFTA do not hurt our crop and livestock producers."
Trump began the meeting with some inaccurate remarks about trade.
He bemoaned last year's US$17 billion trade deficit with Canada and the deficits with Mexico and China. In fact, his own government's statistics show a US$25 billion surplus in services trade with Canada last year and a US$12 billion deficit for goods.
"We have tremendous losses with Mexico and losses with Canada and covered by NAFTA," Trump said.
"We have trade deficits with everybody. Virtually every country in the world we have trade deficits with. And that's going to be changing...We're going to look at NAFTA very seriously...We're already starting the negotiation. Not easy to have an election coming up, so we'll see how that plays. But it's going to be very successful."
The United States has midterm elections next year and Mexico has a presidential election. The United States has expressed a desire to get a deal done before the Mexican campaign season, which starts in the spring.