David MacNaughton insisted he was hopeful the three countries would be able to strike a deal by the current self-imposed deadline of the end of March. | Christian Petersen/Getty Images Trump’s idea of new NAFTA deal is ‘take, take, take,’ Canadian envoy says

The United States promised Canada and Mexico a new "win, win, win" NAFTA deal, but the Trump administration's approach is more like “take, take, take,” Canada’s ambassador to the United States told POLITICO.

"If what is happening here is the negotiation is all about how do we increase production in the United States — whether it be in autos or anywhere else — at the expense of Canada and Mexico, this is not going to end well,” Ambassador David MacNaughton said in an interview at the Canadian Embassy. “What we need to do is find a way where we can see jobs created in the United States, and also in Canada.”


The candid comments Wednesday came in response to U.S. complaints that Canada has not seriously engaged in talks to revamp the North American Free Trade Agreement. President Donald Trump's promise to renegotiate or else withdraw from the pact helped him win heavily union states like Ohio, Pennsylvania and Michigan in last year's election. But Canada and Mexico are balking at many proposed changes — making it hard for the president to fulfill his promise to revamp the deal and increasing the likelihood he might pull out.

MacNaughton brushed off a complaint that Canada has not responded to a U.S. proposal to revamp a controversial mechanism for resolving investment disputes by accusing the United States of making unreasonable demands in other areas.

"I guess if we were in a real negotiation, where the U.S. was putting real substantive proposals on the table that were balanced, those are the kind of conversations we could have," he said.

A source familiar with the U.S. position in the talks last week accused Canada of sniping at U.S. proposals without making counteroffers, and siding with Mexico even if that is not always in Canada’s best economic interest.

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The war of words continued on Thursday. U.S. Trade Representative Robert Lighthizer warned that MacNaughton's remarks could set back the talks. He also took a shot at the embassy official for interjecting himself into the negotiations.

“I’m surprised by these and other comments by Mr. MacNaughton. They seem so obviously to be inaccurate, counterproductive and can only hurt the negotiating process," Lighthizer said in a statement to POLITICO. "Nevertheless, I hope we can still move forward, in a professional manner and with the appropriate officials from Ottawa, to resolve the challenging issues associated with NAFTA and reach a successful conclusion.”

MacNaughton pushed back on the initial U.S. complaints in an interview initiated by the Canadian Embassy. Admitting the remarks had made him "a little grumpy," the former political strategist and close ally of Canadian Prime Minister Justin Trudeau accused the Trump administration of failing to engage in “a real negotiation” by making proposals in areas like auto trade and government procurement that Canada could not accept because it would damage its economy.

“We have consistently from the beginning made some serious proposals on a whole range of issues that include updating the NAFTA, whether that be on the digital economy, small and medium-sized businesses, regulatory reform — a whole series of things where we’ve put really constructive proposals on the table,” MacNaughton said.

Canada has also engaged on U.S. priority areas like autos, where the Trump administration has proposed to dramatically tighten automotive content rules in a bid to increase car production in the United States, MacNaughton said.

U.S. auto and auto parts producers have also objected to Trump's auto proposal, saying it would cost jobs and make North America a less competitive region to make cars.

“So I don’t know why somebody would single us out as being non-constructive when the people who are actually creating jobs in the United States are saying this would have the effect of destroying job creation,” MacNaughton said.

Canada presented all of its initial proposals in Round One of the talks, as promised, while it took the United States until the fourth round in October to put down all of its text, embassy officials said.

For the recently concluded fifth round in Mexico City, Canada presented its analysis of how it believes many of the U.S. proposals would hurt the North American economy.

“You can’t have a negotiation if you can’t at least agree on some kind of a fact base," MacNaughton said. "All we’ve been trying to do is understand … what the impact will be. [We’ve told the U.S.] ‘Here’s what we think it will be. If you have a different view of this, if you disagree with our facts ... please tell us how. Because we just don’t get it. We just think this is actually going to create the opposite effect to what you say you are trying to achieve.’”

So far, the responses from the Trump administration have not been persuasive, he said.

“I have not seen, on some of the key items, an articulation of how this is actually going to work to the benefit of all three parties, or two of the three parties, or anything other than, ‘We believe that this is what we need to create jobs in America and if it’s at your cost, then so be it,'” MacNaughton said. “That’s not a trade negotiation.”

Given that Canadian officials are trying to keep their own constituents happy while accommodating the U.S. interest in updating NAFTA, it's hard to fault Ottawa for its positioning, said Scotty Greenwood, a senior adviser for the Canadian American Business Council.

“This sort of notion that the U.S. is offering all this stuff and the Canadians are not reacting at all, I think is overly simplistic and not exactly the way it goes," she said. “The things that are nonstarters they say are nonstarters. And on everything else they’re engaging.”

Greenwood said she did not want to sound as if she were "an apologist for Canada," and she noted the country has put forward some of its own similarly extreme proposals. But, she added, "I’m just saying given [Canada's] dance partner, I think they’re doing as well as they can.”

Vice President Mike Pence, who recently met with U.S. auto producers to hear their concerns about the Trump administration’s approach to the talks, gave a speech in July at the National Governors Association meeting in Rhode Island, where Trudeau also spoke.

“Under [Trump’s] leadership, we will modernize NAFTA for the 21st century so it is a win, win, win for all of our trading partners in North America,” Pence told the governors to enthusiastic applause.

That attitude is reflected in some areas of the negotiation, MacNaughton said, noting the three countries have made “really good progress” on many items.

“There are four or five chapters that hopefully we can close in the next round, and that would be a good thing because they are meaningful,” MacNaughton said.

“But on some of the key items, where it actually would harm the Canadian economy, we cannot agree and we’re trying to find a way where ... there is some give and take, instead of take, take, take.”

MacNaughton insisted he was hopeful the three countries would be able to strike a deal by the self-imposed deadline of the end of March — largely because the price of failure would be too costly for the United States, and by implication, for Trump himself.

“We’ve got a high degree of optimism right now in the U.S. You’ve got unemployment down to a low level, stock market is booming. Putting this whole trading relationship at risk would put the whole U.S. economy at risk,” MacNaughton said. “That is something we don’t want to see and I can’t imagine that anyone within a few miles of this embassy would like to see.”

Megan Cassella contributed to this report.