Trump starts clock on withdrawing from NAFTA even as trade talks with Canada continue

Show Caption Hide Caption No deal yet in US-Canada trade talks Canadian Foreign Minister Chrystia Freeland says the U.S. and Canada will continue to engage in trade talks, even though the two countries missed a deadline that the Trump administration had signaled less than a week ago. (Aug. 31)

WASHINGTON – President Donald Trump told Congress Friday that he wants to go forward with a U.S.-Mexican trade pact to replace the North American Free Trade Agreement – possibly leaving Canada out in the cold.

Even though Trump's top trade negotiator said he would continue talking to Canadian officials next week, Trump made clear publicly something that he previously would only say privately: He has no interest in compromising with Canada now that he has a Mexican deal in hand.

In Charlotte, N.C., Trump complained about a leak of an off-the-record portion of his interview Thursday with Bloomberg News in which he said he would not compromise with Canada. But then he added, "It's O.K., because at least Canada knows how I feel.”

In a statement Friday afternoon, U.S. Trade Representative Robert Lighthizer sent a conflicting message, saying talks with Canada "were constructive, and we made progress."

By sending a formal notification to Congress Friday, Trump triggered a 90-day clock to fast-track the new trade deal.

"I hereby notify the House of Representatives and the Senate that I intend to enter into a trade agreement with Mexico – and with Canada if it is willing, in a timely manner, to meet the high standards for free, fair, and reciprocal trade," Trump said in his letter to Congress.

The three nations have been trying to reach a trade agreement since Trump threatened to pull out of the NAFTA last year.

The top Democrat on the Senate Finance Committee said Trump is moving too fast.

“It sure looks like the president is more concerned with announcing a deal during election season, rather than getting the best deal possible for American workers," said Sen. Ron Wyden, D-Ore.

The decision came at Trump's self-imposed Friday deadline for negotiations – a timeline that could allow him to win a political victory just in time for the November congressional elections that have Republican trying to defend their majorities in the House and Senate.

Any deal with either or both countries will need approval from Congress, where members are certain to scrutinize its provisions to see how they would affect industries in their states.

Canadian Foreign Minister Chrystia Freeland suggested that Canada wouldn't be rushed into a bad deal, but struck an optimistic tone.

"We know that a win-win-win agreement is within reach," Freeland told reporters late Friday at a news conference. "With goodwill and flexibility on all sides, I know we can get there."

Earlier in the day, she said "we will only agree to a deal that is a good deal for Canada."

Those talks were upended by a Canadian newspaper report on Trump's off-the-record comments. The Toronto Star reported that Trump said any U.S.-Canadian agreement would be “totally on our terms” and that he could not be seen publicly refusing to compromise.

“It’s going to be so insulting they’re not going to be able to make a deal," he was quote as saying in the Bloomberg interview.

Trump later confirmed the remarks.

A U.S. trade official, speaking on condition of anonymity to discuss closed-door negotiations, said Canada had not made any concessions on agriculture.

That could be a significant sticking point, since Trump has been particularly critical of Canada’s 270% tariff on dairy products. "We can't have that. Can't have that," President Trump said at a rally in Evansville, Ind. Thursday night.

“So we made a great deal with Mexico,” Trump said. “And as you know, Canada didn't want to do what we have to have done. And after the deal was made with Mexico, Canada came along, and they're negotiating right now at the White House, at our territory."

Trump said the U.S. wins whether Canada stays in the free trade zone or not. "If it doesn't happen, we'll put tariffs on the cars coming in from Canada, and that'll be even better," he said.

Canada is the second biggest supplier of automobiles to the United States, after Mexico. Trump has proposed tariffs of 25 percent on Canadian-built cars coming into the United States.

The tentative deal with Mexico, meanwhile, would provide for duty-free imports of cars assembled in Mexico – but only if at least 75 percent of the parts originate in the U.S. or Mexico. And many of those parts would have to be made by workers earning at least $16 an hour.

After reaching the agreement with Mexico earlier this week, Secretary of Commerce Wilbur Ross had expressed optimism that Canada would join in. "But if not, they will then have to be treated as a real outsider," Ross told Fox Business News.