US 'might' lift tariffs once new trade deal is signed: incoming Mexican minister

Minister of Foreign Affairs Chrystia Freeland stands during question period in the House of Commons on Parliament Hill in Ottawa on Monday, Oct. 15, 2018. Image Credit: THE CANADIAN PRESS/Sean Kilpatrick

October 22, 2018 - 9:00 PM

OTTAWA - Mexico's future foreign minister says he thinks biting U.S. steel and aluminum tariffs slapped on his country and Canada could be lifted once the three continental partners sign a newly negotiated free trade agreement.

But Marcelo Ebrard, who will assume his new post Dec. 1 when the incoming Mexican government takes office, offered few details Monday on the timing of the trade pact's ratification.

"We believe that it's not the very best agreement, but we do need to support the advances that have been made," Ebrard said through an interpreter at a news conference in Ottawa alongside Canadian Foreign Affairs Minister Chrystia Freeland.

"We believe that it's worth supporting the agreement, looking to the future of all three countries."

Canada and Mexico have responded to the American tariffs by imposing their own retaliatory levies on U.S. imports. The dispute has failed to disappear even after the three countries reached an agreement-in-principle this month on an updated North American free trade pact, also known as the USMCA.

The trilateral agreement was struck before a deadline imposed by the U.S. Congress. The aim was to get the deal fast-tracked and voted on by Dec. 1, ahead of the incoming government of president-elect Andres Manuel Lopez Obrador.

The outgoing Mexican government negotiated the deal, but officials from Lopez Obrador's team were inside the room. Ebrard said the Mexican congress is currently looking at elements of the new deal.

Both Ebrard and Freeland were noncommittal Monday on the subject of when they expected the Trump administration to lift the U.S. tariffs on steel and aluminum, which have been in place since June.

"I think that the time when that might occur is when the agreement is signed," Ebrard told reporters.

"What I expect, based on my communications with the current government, is that this maybe can be resolved. With the current agreement-in-principle, I believe that we will adopt a policy that will leave behind tariffs and quotas between ourselves because that goes against the free trade agreement."

He added he hoped there would be an opportunity to get rid of them as soon as possible.

The Canadian government has insisted the steel and aluminum tariffs are a separate issue from the USMCA — but Trump has acknowledged publicly that the levies helped to expedite the new continental trade deal.

Either way, Freeland offered no timeline Monday as to when she expected the tariffs to be removed.

"I'd love them to be lifted today — there is nothing at all stopping any of us from lifting these tariffs," Freeland said.

"We think that would be great further evidence of the importance of the North American partnership and that is what we're communicating very directly to our U.S. partners."

She repeated the Liberal government's position that the tariffs, which are based on the premise Canada poses a national security risk to the U.S., are "unjustified and illegal." Ottawa, she added, is challenging the levies at the World Trade Organization and at North American Free Trade Agreement panels.

Freeland predicted the positive momentum from the USMCA negotiations should lead to the tariff standoff's resolution.

"It is quite reasonable to think that that positive momentum should bring Canada and the United States to simply say, 'You know what? It's time to lift these tariffs that we've imposed on each other,' " she said.

A Canadian source, who's close to the ongoing talks to resolve the ongoing tariff standoff, said late last week that Washington is trying to get Ottawa to agree to a quota system in order for the U.S. to remove steel and aluminum duties.

Canada is dead set against agreeing to quotas that would limit its exports , said the source, speaking on condition of anonymity in order to discuss sensitive negotiations.

Freeland and Ebrard's meeting was one of several in Ottawa on Monday between the Trudeau government and Lopez Obrador's future cabinet ministers. They also sat down with International Trade Minister Jim Carr and Mexico's incoming economy minister, Graciela Marquez.

Prime Minister Justin Trudeau met with Mexican officials later in the day.

— with files from James McCarten in Washington