Monochrome black, a convoy of cars delivered Prime Minister Justin Trudeau, just in time, from tarmac to hotel. Two motorcycle police blared sirens to part the traffic, and at least for a moment, Washington pushed aside.
In what the minister of foreign affairs has called the most turbulent time in international relations since the end of the Second World War, Trudeau will meet with President Donald Trump to attempt to save NAFTA.
Negotiations have split into two types of demands: one hoping to modernize the agreement, but the second trying to rewind the deal to protectionist times. Trudeau hopes to better befriend Trump to ward off the latter. Sources say Canada is also trying to ally with state governors and may try to delay the deal, or evoke a little-talked-about ultimatum. America has the most demands, Mexico, the most to lose, but it’s Canada that holds the most potential to keep trade free across the continent.
“The strategy for Canada is to say, ‘Absolutely, sure, we’ll talk about all of your irritants,’ ” says Maxwell Cameron, a political scientist and author who interviewed dozens of negotiators about sealing the NAFTA deal, “but these concessions have to be matched.” Trump has claimed he wants to kill the deal, and Canada must gamble with judging the presidential poker face. As Cameron says, “I’d rather read tea leaves or roll dice than read the mind of Donald Trump.”
The bond with Trump is especially important because the Americans may be short-staffed at lower levels. One source in Washington close to the negotiations says the United States Trade Representative, Robert Lighthizer, hasn’t filled all his delegate roles. Working groups would otherwise resolve issues themselves, then call in the chief negotiators if needed, then ministers, and the heads of state only in rare cases. But the source says, “There’s just not enough folks in there. Nitty gritty details are being kicked up the ladder.”
Brian Mulroney, George Bush and Carlos Salinas de Gortari became a trio essential to passing the agreement in the first place, but Trudeau needs to balance his Trump friendship with getting close to state governors. Trudeau went to Rhode Island in July to deliver a keynote speech at a meeting with 35 governors. (Canadian delegates have also reportedly met with all levels of governments including mayors and made hundreds of contacts across the U.S.) Yet, Trudeau’s speech was seen as side-stepping the president, so he shortly after met with Vice-President Mike Pence.
“Do no harm,” pleaded 314 American chambers of commerce in a letter to Trump sent Tuesday. “There are poison pill proposals still on the table that could doom the entire deal,” said Thomas Donohue, president of the U.S. Chamber of Commerce, in a statement. He specifically addressed America’s demand for change in rules around governments procurement of contracts. “This is a bad idea,” he said, “and by the way, no one’s asking for it!”
Some demands ask for NAFTA to modernize—by freeing up e-commerce and digitalizing border processing—but Americans also want to scrap dispute resolution, which Canada has seen as critical. As one source says, “You take that out, in a way you take the guts out of NAFTA.”
Americans could completely gut the deal with a proposed sunset clause, which would make NAFTA expire in five years—a disaster for, say, tomato farmers, who couldn’t plan how much seed to buy for the future. In response, Canada could use an ultimatum, as it currently guarantees Americans access to oil in case of emergency, thanks to a chapter that has seemed symbolic but never tested.
A stronger tactic is for Canada to delay the proceedings. If Trump wants to keep any portion of NAFTA, he’ll want to reach a deal before the midterm congressional elections, which risk bringing in new members to undermine his work so far. The longer Canada waits leading up to these elections, the more leverage it could have.
Mexicans tactically delayed meetings in the 1990s. “They would go into a lengthy, lengthy technical report about Mexican investment performance requirements,” explains Cameron. “They had Canadians and Americans scratching their heads trying to find out how Mexican legislation worked … Mexicans were just sort of playing them and distracting them. We caught on after a while.”
Delay is risky, for if Trump honestly wants to kill the deal as he suggests, then putting off the process would only waste time and money. However, Trudeau did employ this strategy once so far in Washington; the evening he arrived, during a talk at the Fortune Most Powerful Women Summit, interviewer Pattie Sellers paused the discussion to note Trudeau’s polka-dotted socks. “Sometimes they distract people,” he joked. “I’ve already used up [he checked his watch] five seconds of talking about Donald Trump.”
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