WASHINGTON – The U.S. government hopes to take the first formal step in renegotiating NAFTA within the next couple of weeks, setting the stage for actual negotiations with Canada and Mexico later this year.
The Trump administration could officially advise Congress within two weeks of its intention to renegotiate the quarter-century-old agreement, Commerce Secretary Wilbur Ross said Friday.
That would begin a minimum 90-day consultation phase. The administration would then spend a few months collecting input on what positions it should bring to the negotiating table, gathering that advice from lawmakers and industry advisory committees before real negotiations start as early as summer.
It may well take longer than 90 days: American lawmakers have a daunting to-do list that includes more pressing priorities, such as health reform and the first major change to U.S. corporate taxes since the 1980s.
U.S. law gives them a say on NAFTA, too. If the administration wants lawmakers to agree to a simple yes-or-no vote on a trade deal, it must consult with Congress throughout the process – before, during, and after negotiations.
“There’s a very specific set of processes that is required to get through the … so-called fast track,” Ross said Friday, during a news conference with Mexico’s Minister of Economy Ildefonso Guajardo Villarreal.
“The next stage will be – hopefully sometime in the next couple of weeks – issuing the 90-day (consultation) letter. That’s what triggers the beginnings of the formal process itself. We don’t have a date certain for that. We’ve been in discussion with the (key committees) – (the) Senate finance committee and the House ways-and-means committee.”
But the process could be slowed down by a congressional logjam.
The Senate and House committees that would be involved in consultations are tied up with controversial health and tax reforms. It’s not just the finance and ways-and-means committees that need to get involved.
So do the agriculture committees in both chambers, according to the latest version of U.S. fast-track law, which includes nearly six dozen references to consultations that need to be performed.
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There are already major battles on Capitol Hill – between the parties, and also within them.
Prime Minister Justin Trudeau referred to one such feud when asked Friday about a proposal for a border tax – an idea being hotly debated between the two parties, inside the parties, and within the White House itself.
The Canadian government has warned it could retaliate if such a tariff-like border tax were introduced. Trudeau, speaking in Texas at an energy conference, referred Friday to unintended consequences.
But he pointed out that it’s still far from a done deal.
“I think we’re a long way from it being adopted. And as I’ve said, we still don’t know exactly what form it will take – whether it will be different for Canada, or for elsewhere. So I’m not going to get into it,” Trudeau said.
“(But) we think the border adjustment tax would be bad – not just for Canada, but for the United States as well.”
There’s also a feud on Capitol Hill involving trade.
The U.S. Trade Representative’s office is understaffed and doesn’t even have a cabinet member confirmed yet. That’s because there’s a fight over whether Trump’s choice, Robert Lighthizer, needs a special waiver from lawmakers to serve in cabinet after he worked as a lawyer for foreign governments.
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In Canada, the trade process is slightly less formal – guidelines require ministers to present memorandums to cabinet before trade talks, and the government consults industry stakeholders. In the U.S., such consultations are explicitly circumscribed by law.
Trade promotion authority laws, better known as fast-track, comprise the workaround. The current law allows a simple-majority, yes-or-no vote, as long as Congress was consulted in specific ways.
Mexico already has a formal consultation process underway.
Guajardo said it’s almost halfway done: “We’ll be ready by the end of May to start negotiations at any point. Therefore we will just be waiting for the U.S. and Canada to finish their own … process to kick off negotiations.”
One big question mark hanging over the process is whether NAFTA will remain one agreement, or split into several bilateral deals. Canada has occasionally expressed an openness to either scenario, which has caused alarm in Mexico.
Ross also says he’s willing to go either route.
“It will either be two parallel bilaterals, with symmetrical provisions. Or one new trilateral,” he said Friday. “We’re less concerned at this stage with the exact form than we are with trying to get to the substance.”