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Background Press Call by Senior Administration Officials on Trade Negotiations with Mexico and Canada

August 31, 2018

Via Telephone

4:06 P.M. EDT

MS. DAVIS: Thank you. And good afternoon everyone. I'm Emily Davis from the United States Trade Representative Office. Thank you for joining today's call regarding trade negotiations with Mexico and Canada.

As noted in the media advisory, this call is on background only, and the contents are attributable to senior administration officials. Additionally, the contents of the call are embargoed until the conclusion of the call.

Here to provide the background briefing and answer questions is [senior administration official]. So with this introduction, I'll turn the call over to [senior administration official].

SENIOR ADMINISTRATION OFFICIAL: Hello. So what I will do is simply give you some background from the perspective of the Counsel's Office in terms of what you have seen over the last week. And then I think we'll take some questions.

As you know, on Monday, the President announced that the United States and Mexico had reached an agreement with respect to a new trade deal. The President, at that time, also made clear that the United States was interested in having Canada be a part of that agreement. And I think you all know that during this week, there have been intense negotiations going on between the United States and Canada.

Ambassador Lighthizer just put out a statement, stating that the President has notified Congress of his intent to sign an agreement with Mexico and Canada, if it is willing, 90 days from now.

We believe this will be the most advanced, high-standard trade agreement in the world. We are working through the TPA process to allow the ITC and our advisory councils the opportunity to review the text. And we intend to follow the TPA process going forward in order to lay the groundwork for congressional consideration of the agreement.

With respect to Canada, the ambassador said today that obviously we have been negotiating with Canada throughout the whole year-long process. There were a lot of intense meetings this week, as I previously said.

We believe that we had constructive talks, that we made progress, that we are continuing to work toward an agreement. And USTR will meet with Minister Freeland and her colleagues Wednesday of next week.

So we continue to be in a process to work with Canada, in terms of, you know, whether they want to be a part of this historic agreement. But certainly that remains our intention.

Now, as I think you all know, under -- I've used the term TPA, and by that, what I mean is Trade Promotion Authority. And this is a special act that was passed by Congress in 2015 that allows for an up or down vote on trade deals if the Congress believes that we have satisfied the requirements of Trade Promotion Authority, or TPA.

Under TPA, we are supposed to notify the Congress 90 days before the President signs an agreement. So that notification was sent up today. And I think we've been very transparent in saying that we intend to sign an agreement with Mexico and with Canada, if it is willing to be a part of the agreement. So we feel that this has given Congress the proper notice under TPA.

And this is consistent, sort of going all the way back to last May, when we launched the negotiations, and back then we notified the Congress again that we intended to negotiate with Mexico and Canada for an update of the NAFTA.

So throughout this process, obviously we've tried to be transparent in terms of explaining our intentions to the Hill, and we will continue to do so. We believe that everything we have done is consistent with the Trade Promotion Authority, and that while the final decision, obviously, belongs to the Hill, we are making every effort we can to comply with all the provisions of the act.

So right now we're on pace to continue to working on the act -- on the agreement. Under the act, we're supposed to send up text of the agreement within 30 days.

Let me clear up one point here, which is -- is this that will be a full renegotiation of the text. Some people have acted -- there's been some indications that some people seem to think it only applies to maybe one or two sectors of the economy, or that maybe we just have, kind of, a term sheet and we're still working through what's happening.

But the truth is, we are on pace to provide a full text that will allow for a new high-standard agreement that will completely update NAFTA across the board. It will address agricultural issues. It will address intellectual property, digital trade, services. And we think it's going to be the best and the most advanced agreement the United States has ever taken into account or has ever been a part of.

So we've reached out to the advisory committees, and they know that they're supposed to be working on their report to give us advice on what they have been able to see of the report. Those reports will be due 30 days from today.

We've also reached out the U.S. International Trade Commission, which has to prepare its own report regarding the likely impact of the agreement. That process will be ongoing, and we'll be continuing to work the ITC. And of course, we're continuing to engage with Congress and to its consideration of the agreement.

So I know there's been a lot of speculation out there about where things stand, but I think it should be clear that we are on pace, as Ambassador Lighthizer has consistently said, to comply with Trade Promotion Authority and to complete an agreement with Mexico, and hopefully with Canada, that will be a fully compliant and eligible for fast track, and that Congress will hopefully take up and pass.

It's been a lot of work, obviously. I think you guys know that to make this much progress in any trade negotiation over the course of a single year is an unusually fast rate of speed for trade negotiations. But I think all three countries have worked together very productively, and we're getting more and more excited about the results.

So I think that's basically, sort of, the background points I wanted to cover and wanted to make sure that people understood where things stand.

And I think at this point, probably the most productive thing would be for me to take questions.

Q: Two questions. One is -- so what is, to your mind, a new deadline? Is it the 60 days in advance of signing when you have to make the text public?

And secondly, you have said repeatedly that you hope to have Canada involved. But if you can't reach an agreement with Canada by what you consider the deadline, are you still willing to go ahead with a U.S.-Mexico-only agreement?

SENIOR ADMINISTRATION OFFICIAL: So with respect to the first question -- you know, obviously, as you know, the Congress is the final arbiter with respect to Trade Promotion Authority. Right? So I'm not going to basically purport to say what Congress would regard as the deadline. I can certainly describe their process.

Under the statute, we're supposed to notify them 90 days out. We did that today. Thirty days from now, we're supposed to give them a text. We believe we'll be on pace to do that. And then, 60 days after that, we'll have a signing. And then, I think -- you know, at that point, obviously we have an agreement that's been signed. And then they can start the rest of their process.

So I don't want to pre-judge what they would regard as, sort of, a hard deadline for purposes of making sure that they got enough notification so that they can properly consider the agreement. That would obviously be something for them to decide. I can certainly say that we feel that up to this point we have been very transparent with them, and that they should be very aware of, sort of, the status of where things are.

The second question, I think, sort of, you know, really relates to a hypothetical that I'm not going to be the person who makes that decision, or, you know, has any sort of big role in making that decision. So that would -- I'd really refer you over to the White House, or to Ambassador Lighthizer, or to somebody who would be closer to the decision-making process on this.

Q: Hi, I'm just wondering if you can comment on how close you think you are to an agreement with Canada. And secondly, what do you think is a reasonable timeframe for all of this to get done and to be approved by Congress? Thanks.

SENIOR ADMINISTRATION OFFICIAL: So, the first question, I'm not going to go beyond what Ambassador Lighthizer said in his statement. You know we've been negotiating with Canada for a year. This week, those meetings continued at all levels. The talks were constructive and we made progress. And I understand from the press that Minister Freeland will be issuing her own statement. And so I'm not going to sort of go beyond what the two ministers had to say.

Obviously, you know, we intend -- as I indicated earlier, we intend to meet with her sometime next week. So that's where we are in terms of the process.

You know, in terms of -- you know, what happens once it goes up to the Hill, you know, the statute contains a number of measures designed to make sure that Congress has every opportunity to have its appropriate role of input in terms of considering a trade agreement. And as you know, sometimes that process can take some time and sometimes it can go more quickly. And a lot of that is going to be determined by the views of folks up on the Hill. So I'm not -- I'm not really in a position to give you much more guidance on that.

Q: Hello, thank you very much for taking our questions. I'm wondering if you could shed some light on what the position is, or what the concerns are from the American position. And with the outstanding issues with Canada, what we're hearing is that the challenges remain chapter 19, and access to the Canadian dairy market. Is that your assessment? Or what are your concerns?

SENIOR ADMINISTRATION OFFICIAL: Well, I'm [senior administration official], so I mainly -- you know, my focus is mainly more on, sort of, some of these procedural issues that we've been talking about. And I'm -- unfortunately, I'm really not the best person to be trying to characterize the state of play in the negotiations.

I would just refer you back to Ambassador Lighthizer's statement, which says that the talks were constructive, we made progress, and we continue to work toward agreement.

And, like I said, I think Minister Freeland will be having her own comments. But I'm not going to say anything beyond that.

Q: Hi, thanks for doing the call. I just had a question about the timeline on going -- if you do choose to just go with a Mexico agreement, is there a chance that you may have to start some of the TPA processes all over again? Some of the senators were suggesting that you don't have the authority to do a bilateral when they specified a trilateral agreement. So what is the process for that?

SENIOR ADMINISTRATION OFFICIAL: Well, obviously, you know, at the end of the day -- I want to be very clear on this. At the end of the day, the Senate will make its own decisions as to whether or not we're in compliance with Trade Promotion Authority. And so I'm not in a position to tell you, obviously, what the Senate will do.

What I would say is this: Our reading of the Trade Promotion Authority statute is, is that, last May, we were supposed to tell the Senate and the House of our intentions with respect to these negotiations. We told them at the time that we intended to enter into negotiations with Mexico and Canada.

We have now spent a year negotiating with Mexico and Canada, and we have made extraordinary process -- I mean, progress. And we hope -- we remain hopeful that we will be able to complete a deal with both countries.

Today, we were supposed to give them 90-days' notice on the President's potential entering into an agreement. So we sent them a letter today saying that we intend to enter into an agreement with Mexico and with Canada, if Canada is willing to participate in that agreement.

So I would emphasize that, throughout this process, we've been very transparent with the Hill. We've been very clear in terms of the state of play of the negotiations. And that's where we stand.

Obviously, the Senate will make its own decisions. I would expect that members -- certainly, from my perspective, as [senior administration official] -- there would be risks in interpreting the TPA statute to require that, if USTR were to begin, say, with two or three countries, then USTR is required to sign an agreement with all of those countries, no matter what any of the countries were asking for.

To me, that would be a reading of the statute -- it wouldn't so much constrain the executive branch as it would potentially constrain the Congress, because it would indicate that if you had a situation where some of the countries were ready to go forward, but some of the other countries maybe were being unreasonable, and the Congress wanted to go forward anyway, that somebody could come in and say, "Well, no, you can't because of this notice that was given back at the beginning of the process."

So that strikes me as kind of an odd reading of the statute. But, at the end of the day, obviously it's going to be up to the Congress.

All I can say is that, up to this point, we feel that we are in full compliance with the statute and that we've been very transparent with the Congress on our intentions. And that would be our expectations going forward as to what we would do.

Q: Hi. Thanks for doing this call. I guess I'm a little unclear about the status of negotiations with the Canadians at this point. They are ongoing currently? And how have the comments that the President made -- it was revealed today, the President confirmed that he's not willing to compromise with the Canadians on this. How has that affected the status of those negotiations? Could you speak to that?

SENIOR ADMINISTRATION OFFICIAL: Well, again, you know, as [senior administration official], I'm not going to, sort of, get into what the status -- you know, I mean, what I'll tell you is what Ambassador Lighthizer said: We have been negotiating with Canada throughout this yearlong process. This week, those meetings continued at all levels. The talks were constructive, and we made progress. Our officials are continuing to work toward agreements. The USTR team will meet with Minister Freeland and her colleagues next Wednesday.

So that's where things are. You know, in terms of what the issues are or what the mood in the room is, I'm really not the best person to ask about that.

Q: Hi, thank you so much for taking the call. I'm curious, if Canada isn't in the agreement, would you need to renegotiate any portions of it? Meaning, you worked out this text as a trilateral deal, so does the text actually work as a bilateral deal with Mexico, either legally or in terms of the North American economy?

SENIOR ADMINISTRATION OFFICIAL: Well, I think, you know, the actual text of the agreement is obviously due -- is actually due -- is obviously due to the Congress within 30 days. So as you get closer to that 30-day period, obviously you do need to start putting the agreement closer and closer into the form that you want to submit it when it goes to the Hill.

So, you know, obviously when we get to that process, we will be taking into account the type of factors that you raised. What I would say is, is that what we've said in our notice is, is that we intend to sign an agreement with Mexico and with Canada, if it is willing to participate. We feel that we can satisfy the TPA statute under whichever of those scenarios plays out.

Q: I just wanted to return to the questions that were raised earlier regarding potential sticking points with Canada. We understand that one of those issues may be related to potential increases in healthcare prices as it relates to some of the agreements that were hatched with Mexico. And I'm just wondering if you can comment at all on whether or not that was, in fact, a sticking point in the negotiations about something that the U.S. is willing to concede on in the next round of talks as things move forward.

SENIOR ADMINISTRATION OFFICIAL: No, unfortunately I'm not really in a good position to sort of characterize the state of the negotiations at that level. So I don't really have anything more for you on that question.

MS. DAVIS: All right. And with that, we will conclude our call. Thanks everyone for your time and participation in this call. Again, this has been a background call, so the contents are attributable to senior administration officials. The embargo is now lifted. If you have further questions, please contact USTR's Public and Media Affairs office at 202-395-3230.

And a special thanks to our moderator. Thanks again everyone.

END 4:26 P.M. EDT

Donald J. Trump, Background Press Call by Senior Administration Officials on Trade Negotiations with Mexico and Canada Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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