Canada on the Sidelines as U.S. and Mexico Near an Agreement on Nafta

The Ambassador Bridge connects Windsor, Ontario to Detroit, enabling a steady flow of goods between Canada and the United States and helping the countries forge a close economic bond.

WASHINGTON — When officials from the United States, Canada and Mexico gathered a year ago to begin negotiations over the North American Free Trade Agreement, many of those involved in the talks assumed there would be a hard road ahead.

But few of them would have anticipated the current state of affairs: frayed relations between the United States and Canada, traditionally close economic and political partners, and a growing bond between the United States and Mexico, which President Trump has accused of stealing American manufacturing jobs.

On Friday, the United States and Mexico appeared close to agreeing on how to revise the 24-year-old Nafta deal. Canada, which has become one of Mr. Trump’s favorite foils in his fight over global trade, was not party to the talks.

“We’re not negotiating with Canada right now,” Mr. Trump said at a cabinet meeting on Thursday. “Their tariffs are too high; their barriers are too strong. So we’re not even talking to them right now.”

Negotiators from the three countries have sought to present the situation as normal. They say the United States and Mexico are focused on working out differences that are specific to them, especially in relation to the agriculture and automobile industries, and that Canada would return to the talks once those matters were resolved.

In a statement on Thursday, Adam Austen, a Canadian government spokesman, said the country’s foreign minister, ambassador to the United States and negotiating team were “in regular contact with their counterparts” and looked forward “to continuing these important discussions in the coming weeks.”

Privately, former and current officials from the three countries acknowledged that four straight weeks of meetings between the United States and Mexico appeared meant to pressure Canada to move more quickly and to offer more concessions in the Nafta talks.

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The United States and Mexico have expressed interest in signing a new Nafta deal by the end of August. That now looks hard to do considering how many issues are unresolved. But meeting such a deadline would allow Mexico’s outgoing president, Enrique Peña Nieto, to cement his legacy by signing a final deal before leaving office on December 1.

It would also give congressional Republicans another trade-related accomplishment to promote before the midterm elections in November, and allow the Trump administration to focus on other trade conflicts, like its complicated dispute with China.

Canadian leaders have been more circumspect, asserting that they would not hurry to sign a deal they felt was bad for their constituents. Political analysts say that Prime Minister Justin Trudeau has little incentive to rush into a deal, given that many Canadians are critical of Mr. Trump and want their government to take a tough stance on trade.

Mr. Trump has repeatedly floated the idea of temporarily scrapping Nafta talks with Canada and turning the three-country agreement into one between the United States and Mexico alone.

Such a two-party deal is highly unlikely, given the opposition to such an arrangement in Congress, by Mexico and among the North American industries that depend on the current framework. But the president’s threats indicate the extent of administration officials’ frustration with Canada, which they describe as the most recalcitrant party to the talks.

Mr. Trump’s presidency has been confusing for Canada, whose residents see their country as the United States’ closest ally. That has made Mr. Trump’s threats to tear up Nafta, a key piece of the relationship, dispiriting. The tariffs he imposed on Canadian steel and aluminum, citing national security concerns, have strained the bond further. By last spring, Canadian approval of the United States had sunk to a three-decade low.

The tension has been a surprising outcome for the Nafta talks, which were expected to focus on Mexico’s lower wages and trade surplus with the United States.

“In the very beginning, you’ll recall that the Canadians were the teacher’s pet,” said Michael Camuñez, chief executive of Monarch Global Strategies and a former Commerce Department official. “And there were comments made by Trump himself that he really had no concerns about Canada. It was Mexico that was the problem child.”

“Now Canada seems to be on the backbench,” Mr. Camuñez said.

Relations with Canada worsened at a Group of 7 summit in Quebec in June, when Mr. Trump lashed out at Mr. Trudeau over trade-related issues, calling him “very dishonest & weak.” Peter Navarro, a Trump administration trade adviser, said in a televised interview that there was a “special place in hell” for leaders like Mr. Trudeau who engaged in what Mr. Navarro called “bad-faith diplomacy.” Mr. Navarro later apologized for the comments.

Canadian officials denounced the attacks as inappropriate. Some went further, with a former foreign affairs adviser to Mr. Trudeau calling Mr. Trump a “pathetic little man-child.”

Maryscott Greenwood, chief executive of the Canadian American Business Council, said the Trump administration had asked Canada to offer some sort of concession — on its high dairy tariffs, for example, or its automotive content rules — to restart the Nafta discussions.

In the meantime, Robert Lighthizer, the United States trade representative, appears to be forging a closer relationship with the Mexican negotiators, including Jesus Seade, who is representing the incoming Mexican administration of Andrés Manuel López Obrador.

In July, Mr. Lighthizer and Mr. Seade had a private lunch at the exclusive Metropolitan Club in Washington. During a more recent round of talks, Mr. Lighthizer invited Mr. Seade to stay with him after the rest of the Mexican team left.

In the cabinet meeting on Thursday, Mr. Lighthizer said he hoped that the United States and Mexico would have a “breakthrough” in the next several days. After that, he predicted, “Canada will come along.”

Mr. Lighthizer may have been referring to the United States and Mexico nearing an agreement on one of the thorniest issues in the Nafta talks: the rules governing whether vehicles made in North America can qualify for zero tariffs under the pact.

The United States has proposed requiring a greater proportion of a car’s value to be manufactured in North America to qualify for that treatment. It has also proposed various rules that would require carmakers to use a certain proportion of steel, aluminum and automobile components made in North America, and to have a certain proportion of a car’s value be made by workers earning at least $16 an hour.

In return, Mexico has asked the United States drop a proposal that would let American farms block Mexican products more easily. It has also sought assurances that the Trump administration would lift the tariffs it has already imposed on steel and aluminum shipments from Mexico, and not hit Mexican products with the new tariffs Mr. Trump has threatened on imported cars.

Negotiators still have to iron out solutions to other contentious issues, including a proposal by the United States to add a sunset clause to the deal that would cause Nafta to automatically expire after five years unless the countries voted to continue it.

Over the past year, negotiators have blown past a series of deadlines for completing their talks, including the end of last year, the end of the first quarter and mid-May.

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