Ways and Means Democrat: Lighthizer floated idea of closing NAFTA with Mexico first

Feb 7, 2018 Issues: Trade

U.S. Trade Representative Robert Lighthizer on Wednesday floated the possibility of concluding NAFTA talks with Mexico first if the United States and Canada continue to lock horns at the negotiating table, according to a lawmaker who attended Lighthizer's briefing with House Ways and Means Committee members.

“He thinks more progress has been made with Mexico and that there might be a way to wrap things up with them and just maintain ongoing negotiations with Canada at that point,” said Rep. Ron Kind, a Wisconsin Democrat who supports free trade.

A USTR spokeswoman declined to comment. Lighthizer also declined to offer a comment following a roughly hourlong meeting with a bipartisan group of committee members.

The United States and Canada have emerged as surprising adversaries in the talks, as Ottawa has very publicly criticized U.S. proposals it has deemed “poison pills.” Mexico has maintained a lower profile in the talks, although it has generally sided with Canada against many of the more controversial U.S. proposals.

The three countries concluded their sixth round of negotiations at the end of January.

At the last round of talks in Montreal, Canada took a lead role in presenting alternatives to U.S. proposals, including the controversial U.S. position on tighter automotive rules of origin. Mexico has said it also opposes the U.S. auto proposal, recently calling it unworkable.

Canadian negotiators at the last round also put forward workaround proposals, such as creating a separate Canada-Mexico investor-state dispute settlement mechanism as a result of the U.S. wanting to opt out of that process. Canada also put forward a proposal — that raised the ire of Lighthizer — in which Canada said it would reserve the right to not automatically grant the U.S. and Mexico the same concessions Ottawa offers on services and investment in any future deals it reaches with other countries.

“The ambassador seems inordinately fixated on relative GDP strength between the countries,” Kind said. “Since we’re the biggest dog on the block, everyone should just come to all our wishes — I think that’s a lousy negotiating tactic.”

However, other lawmakers don’t see a quick deal with Mexico as possible amid demands that Lighthizer leverage NAFTA to press for major labor and wage improvements in Mexico.

Lighthizer “didn’t say we could wrap it up with Mexico under the present circumstances,” said Rep. Sandy Levin, a Michigan Democrat. “He outlined very clearly what is the situation in Mexico. He used the term ‘their industrial policy.’ He said the wages in Mexico are totally unsatisfactory and that they are using that as a basis for their industrial development.”

Mexican Economy Secretary Ildefonso Guajardo opposed those demands at the end of the last round, saying his government would continue its labor reform agenda separate from the trade talks.

House Democrats are demanding that Lighthizer put Mexico’s labor issues front and center in the NAFTA talks. They accuse the country of backsliding on promised reforms and warn that any renegotiated deal will get little to no Democratic support if improvements can't be made.

“I expressed very clearly to Mr. Lighthizer that I was more than hopeful they would do that,” Levin said, when asked if USTR made any assurances it would start to address Democrats’ labor demands at the next round of talks that start at the end of the month in Mexico City.

Ways and Means Chairman Kevin Brady (R-Texas) said the meeting Wednesday was “productive,” stressing in a statement that the deal should stay enforceable.

The administration has not only proposed to potentially opt out of investor-state dispute settlement, but also make the pact’s state-to-state dispute process less binding and eliminate a special dispute process for challenging trade remedy decisions.

“I want to make sure we hold our trading partners accountable through strong, enforceable commitments with effective dispute settlement, including ISDS, because it creates U.S. jobs,” Brady said in a statement. “People in my district and across the country are counting on us to get this right, which is why we all have to stay at the table.”

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POLITICO: Ways and Means Democrat: Lighthizer floated idea of closing NAFTA with Mexico first