Skip to main content
Open this photo in gallery:

U.S. President Donald Trump wants to rename NAFTA the 'USMC,' after the participating countries.Rebecca Cook/Reuters

U.S. President Donald Trump says he wants to rename NAFTA the “USMC” – for U.S., Mexico, Canada – and is threatening to cut out the Canadians and drop the "C" from the agreement’s name if Ottawa doesn’t offer significant concessions in deadlocked talks.

The American leader’s latest effort to goad Canada into cutting a deal comes as talks remain stalemated over U.S. access to Canada’s heavily protected dairy market and the future of the binding Chapter 19 appeal process for companies hit by anti-dumping or countervailing duties.

A former lead trade lawyer for the Canadian government says he has heard that the talks remain “miles apart” on Chapter 19 and that both sides are also unable to agree on rules that will govern access to government procurement markets and the Chapter 20 dispute-resolution system.

“This seems to be coming down to a kind of game of chicken,” Matthew Kronby with Borden Ladner Gervais in Toronto said of the North American free-trade agreement talks. Mr. Kronby headed Ottawa’s Trade Law Bureau before he left government.

“It doesn’t look like any part of this negotiation is about win-win – it’s entirely about extracting concessions from Canada and Mexico under duress,” Mr. Kronby said.

The United States and Mexico cut a deal in principle in August without Canada. The Americans and Canadians have been negotiating since to see whether they can reach an arrangement that would allow all three countries to move forward. The Trump administration has threatened to proceed without Canada and has set Sept. 30 as the deadline for the text of the proposed U.S.-Mexico deal to be hammered out.

Canada and the United States hit pause on NAFTA talks this week after a meeting between Foreign Affairs Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer in Washington on Tuesday. It was expected Ms. Freeland might return on Thursday, but this did not happen.

Ms. Freeland and Mr. Lighthizer spoke by telephone on Wednesday and the result was that lead Canadian negotiator Steve Verheul returned to Washington without the minister to work on technical matters related to the negotiations. Ms. Freeland and her U.S. counterpart discussed the possibility of resuming face-to-face negotiations as early as Tuesday, but no date has yet been set, a government official said.

The Wall Street Journal reported Mr. Trump’s latest remarks about rebranding NAFTA on Thursday, saying the U.S. President told supporters at a fundraising dinner on Wednesday the agreement could be renamed as the “USMC” pact. USMC is also an acronym for the U.S. Marine Corps. Mr. Trump complained about Canada during this private fundraiser, saying Canadian officials describe themselves as good friends to the United States but impose tariffs of more than 200 per cent on some American dairy imports, the Journal reported.

Prime Minister Justin Trudeau said on Thursday he won’t be constrained by the Sept. 30 deadline that the United States is working toward.

“We have seen various deadlines put forward as markers to work for,” Mr. Trudeau said during a wrap-up of a governing Liberal Party retreat in Saskatoon.

“We’re going to continue to work towards the right deal for Canadians, a good deal for Canadians, and we’ll do the work needed and try and get there as quick as we can, but we’re going to make sure we’re doing what is necessary to get the right deal for Canadians.”

He shrugged off Mr. Trump’s suggested new name for NAFTA, saying it’s not something he’s thought about.

“I don’t think we’ve spent much time talking about what the name or potential name or renaming could be,” he said. “We’re focused on making sure we’re delivering good jobs for Canadians.”

It’s not clear that Sept. 30 is a hard deadline for Canada because, as trade watchers have noted, the terms of agreement with the Canadian government could be added to the revised NAFTA deal even after legislation was drawn up. Some members of the U.S. Congress have also threatened to hold up a deal that excludes Canada.

The United States wants to water down or eliminate NAFTA’s Chapter 19, win significant new access to Canada’s dairy market and relax foreign-ownership restrictions on Canadian media companies by removing a cultural-exemption clause in the trade pact. So far, Canada has been unable to obtain a guarantee from the United States that the country would not be hit with punitive U.S. auto tariffs if Ottawa agrees to a new NAFTA deal.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe