Presidential adviser Jared Kushner (L) and Robert Lighthizer, the U.S. trade representative, helped wrap up a deal in August with Mexico revising the North American Free Trade Agreement. Text of that deal is being published in time to beat the deadline that leaves it eligible for fast-track approval.
(ERIC BARADAT/AFP/Getty Images)

US President Special Advisor Jared Kushner (L) and US Trade Representative Robert Lighthizer (R) cross the street from the Trade Reprsentative's office to the White House after a meeting with Mexican Governement Ministers and officials on NAFTA in Washington on August 26, 2018. - The United States and Mexico are close to reaching a consensus over key issues stunting efforts to renegotiate the North American Free Trade Agreement (NAFTA), officials from both countries said during the week-end. (Photo by Eric BARADAT / AFP) (Photo credit should read ERIC BARADAT/AFP/Getty Images)

Finishing off trade negotiations is never easy, but reaching a deal in the NAFTA renegotiations may be even tougher. The Office of the U.S. Trade Representative is set to publish the text of the new trade agreement between Mexico and the United States on Sept. 28 and to announce its intention to move forward with the deal. The agreement is a victory for U.S. President Donald Trump's administration, which was eager to wrap up the talks before midterm elections in November and before Mexico's next president, the populist Andres Manuel Lopez Obrador, assumes power in December. But the negotiations aren't over yet. Discussions are still underway with the North American Free Trade Agreement's third party, Canada, with no clear timeline for their conclusion.

Time Is of the Essence

For the White House, the trade negotiations with Mexico have been a race against the clock. Trump intends to fast-track the agreement under the 2015 Trade Priorities and Accountability Act, which enables Congress to approve trade deals with a simple yes or no vote, without the possibility of filibustering or amending the implementing legislation. Using fast-track authority, however, requires him to release a draft of the agreement in question at least 60 days before signing the deal. By satisfying that condition, Trump would be on track to sign the agreement at the end of November, a critical deadline for the White House. Lopez Obrador is set to take his oath of office in Mexico on Dec. 1, and if the agreement were not finalized before his inauguration, he could demand changes.

Canada, on the other hand, has no such deadline for the NAFTA negotiations. And since the country has shown no sign of budging on issues such as auto rules and tariffs, protections for its dairy products, dispute settlement processes, and sunset clauses, the Trump administration is moving ahead without it. The decision will enable the White House to dodge the Lopez Obrador problem, but it will also create complications of its own.

Getting Around Canada

For example, by leaving Canada out for now, the trade deal with Mexico could encounter obstacles in Congress. The procedural requirements for use of fast-track authority include a provision that the president must send a notification letter before starting trade negotiations. Trump did so in May, but the letter his administration sent described "negotiations with Canada and Mexico regarding modernization" of NAFTA. That phrase is a sticking point for several lawmakers who argue that the notification covered only an agreement among all of NAFTA's parties, and not a bilateral deal between the United States and Mexico. As a result, they argue, the new U.S.-Mexico pact would not qualify for fast-track approval. And more than the procedural questions, the risks of disrupting trade ties with Canada — the largest export destination for 36 U.S. states — has many members of Congress worried.

Of course, the deal isn't final yet. The president, in fact, has no deadline after signing it for giving Congress a final draft of legislation to implement the deal. And a few outstanding requirements, including providing an initial version of the implementing bill, remain before the White House can submit the final legislation to Congress. That means lawmakers won't vote on the legislation until February or March of next year, at the earliest.

A Soft Deadline

Between now and then, the deal could evolve. Canada, for example, could reach an agreement with the United States in time to join the deal with Mexico, or Washington could simply wait to submit implementing legislation on the agreement until Ottawa has signed off on it. Trump could submit legislation on a U.S.-Mexico agreement, and Congress could shoot it down. The president may then announce the United States' withdrawal from NAFTA, though Congress and the courts would challenge his authority to do so. Alternatively, the White House could move forward with the Mexico deal and with the accompanying legislation while continuing negotiations with Canadan in hopes of eventually adding the agreement with Ottawa to the bilateral pact.

The reality is that Dec. 1 is a deadline for the Trump administration, not for Canada. Ottawa still has time to negotiate before the U.S. president must decide whether to try to pass legislation for a bilateral deal with Mexico in early 2019. And if the discussions to date are any indication, the Canadian government won't give up in the meantime on its priorities for the new NAFTA.

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