In a move that is certain to have far-reaching implications for Texas, President Trump announced Monday that the United States has reached a preliminary trade agreement with Mexico. Trump also intends to terminate the name of the 24-year-old North American Free Trade Agreement. “It’s a big day for trade. It’s a big day for our country,” Trump told reporters gathered in the Oval Office. Trump’s announcement immediately shifted the focus to Canada, which had not been part of recent talks regarding NAFTA.
Details of the deal are still being hammered out and the implications for Canada remain to be seen. President Trump referred to the possible new deal as the United States-Mexico trade agreement, and told reporters that he would see if Canada could be part of the deal. Mexico is said to want a trilateral agreement that includes Canada, a sentiment that was underscored by a tweet put out by Mexican president Enrique Peña Nieto, who said he had spoken with Canadian prime minister Justin Trudeau and expressed the “importance of re-joining the process, with the goal of concluding the trilateral negotiation this week.” But Peña Nieto is also facing a deadline to reach some sort of agreement quickly so that the Mexican Congress can approve it and he can sign it before he leaves office on November 30.
Hablé con el Primer Ministro de Canadá, @JustinTrudeau, sobre el estado de las negociaciones del TLCAN y el avance entre México y EUA. Le expresé la importancia de su reincorporación al proceso, con la finalidad de concluir una negociación trilateral esta misma semana.
— Enrique Peña Nieto (@EPN) August 27, 2018
“I spoke to the Prime Minister of Canada @JustinTrudeau about the status of the NAFTA negotiations and the advance between Mexico and the US. I expressed the importance of his reinstatement in the process, in order to conclude a trilateral negotiation this week.”—Mexican President Enrique Peña Nieto
Governor Greg Abbott also pointed out the significance of a trilateral agreement, pointing out that Canada is a major trading partner with Texas. “Texas is the nation’s top exporting state, and with Mexico being our largest trading partner, this new deal should be good for the Texas economy,” Abbott said in a written statement. “Canada is our second largest trade partner, and I remain hopeful that negotiations with Canada will be equally productive.”
U.S. Representative Henry Cuellar, D-Laredo, whose district has been transformed by NAFTA over the past two decades, praised the move. “While this entire process could have been avoided without the dramatization and harsh rhetoric from the administration, which has created uncertainty for business and stifled growth, this preliminary deal presents us with the opportunity to modernize the trilateral agreement which has grown trade between the United States, Canada, and Mexico from $290 billion in 1993 to over $1.1 trillion in 2016,” Cuellar said in a written statement. “These numbers reflect what I have said all along: NAFTA is an integral part of our economy. Businesses large and small throughout the country simply cannot function in an environment of unpredictability. They rely on the stability, as provided by this treaty, to grow and remain competitive.”
U.S. Representative Vicente Gonzalez, D-McAllen, expressed caution. “For more than two decades, the North American Free Trade Agreement has bolstered local economies and opened doors for communities in South Texas,” he said in a written statement. “Since renegotiation talks began, South Texas farmers, ranchers, businesses, and community leaders have anxiously waited for the administration to deliver NAFTA 2.0. Today, we are closer to achieving that goal, but must still work to raise food safety standards, reduce non-tariff trade barriers, improve supply chain security, and lower costs for consumers while ensuring trade that is equitable and just for all North Americans.”
U.S. Representative Joaquin Castro, D-San Antonio, wanted more details. “The President’s NAFTA announcement is light on details and leaves out our critical ally Canada,” Castro said in a written statement. “Getting NAFTA right is critical to Texans and to the American economy as we rely on trade with both Mexico and Canada.”
McAllen mayor Jim Darling also expressed hope that Canada will continue to be part of a trading pact, but said it was hugely important to South Texas that some sort of agreement with Mexico be in place. “I would think that we would want to have a North American trade agreement,” Darling told Texas Monthly. He said that NAFTA has had an enormous economic impact on the Rio Grande Valley and getting rid of it without a replacement “would not suit our area at all.” While specifics of the deal were scant, the New York Times reported that the agreement centers on the auto industry, which could have an immediate impact on Darling’s region. That’s because of manufacturing plants in the Rio Grande Valley that supply neighboring Reynosa, Mexico, which has numerous plants across the border, with partially assembled parts that are then finished and sent to auto manufacturing facilities in other parts of Mexico.
Cuellar hinted that Congress may not be receptive to a bilateral agreement with Mexico when the trilateral NAFTA pact has had positive benefits over its lifetime. “Although this deal is a step in the right direction, there is still a lot of work to do before Congress votes on this agreement,” Cuellar said. “Canada still must agree to U.S.-Mexico agreements that affect their interests, and there is significant trilateral ground to cover. We must solidify a deal that includes Canada, so that we can build upon the successes of NAFTA and strengthen trade relations with both partners. I ask that the administration quickly provide me with a detailed briefing, so that I remain engaged on this issue. I will continue work with my colleagues on both sides of the aisle and in both chambers to make certain that the new U.S.-Mexico agreement continues to promote job growth and stimulate the economy, just as it has since its inception.”
Former U.S. ambassador to Mexico Antonio Garza also called Monday’s announcement a step in the right direction, but cautioned against any immediate celebrations. “What’s not clear is the status of Canada,” Garza said in a written statement. “That and approval from the countries’ respective congresses, one of which will involve significant turnover in but a few short days (Mexico), and our own, which will be facing midterm elections in November. Upshot: Let’s not get ahead of ourselves.”
Garza also addressed simmering tensions between the United States and Mexico. “As for relations generally, it’s too early to tell,” he said. “I think the citizens of both countries have accommodated the reality of the ‘new-new,’ which means nothing’s final. And today’s good feelings are simply that: today’s good feelings. This [U.S.] administration has shown an amazing lack of both diplomacy and consistency in its dealings with our friends, neighbors, and allies, and I don’t see that changing.”