Trump Aide Pins Nafta Failure on Canada and Hell-Bound Trudeau

(Bloomberg) -- Donald Trump’s trade adviser on Sunday blamed Canada for the failure to finalize a reboot of the North American Free Trade Agreement and suggested the country’s prime minister is headed to hell for crossing the U.S. leader.

“We’d have a great deal with Nafta by now if the Canadians would spend more time at the bargaining table and less time lobbying Capitol Hill, and our press and state governments here,” Peter Navarro said in an interview on “Fox News Sunday.” “They are just simply not playing fair. Dishonest. Weak.”

Navarro also said “there’s a special place in hell” for any foreign leader engaging in “bad faith diplomacy” with Trump, referring to Canadian Prime Minister Justin Trudeau.

White House economic adviser Larry Kudlow also said on ABC’s “This Week” on Sunday that “we were very close to making a deal with Canada on Nafta” before Trudeau criticized the U.S. after a meeting of the Group of Seven nations, drawing a rebuke from Trump. Many observers, include U.S. Trade Representative Robert Lighthizer, have said the sides are not close to a deal.

The comments came a day after Trump said Nafta negotiators were “pretty close” to agreeing on some kind of sunset clause, a sticking point in talks -- but also after a spat developed between the U.S. president and Trudeau.

“Two things can happen on Nafta. We’ll either leave it the way it is as a threesome deal” and “change it very substantially,” Trump said Saturday in La Malbaie, Quebec, speaking to reporters before departing the Group of Seven leaders’ meeting. Otherwise, “we’re going to make a deal directly with Canada, directly with Mexico.”

‘Good Meeting’

Nafta was a key topic when Trump held a bilateral meeting with Trudeau on Friday, with Trump later saying they had a “very, very good meeting.” A frenzied effort in May to reach a deal that could pass the current U.S. Congress by the end of this year has stalled, in part after Trudeau’s final push ran up against Trump’s insistence on a five-year sunset clause that would see the pact renegotiated or killed after five years.

Any Nafta deal will have a sunset provision of some kind, Trump said Saturday, though he indicated some people are pushing against a five-year time frame. “We’re pretty close” on the sunset provision, he said.

The president also signaled that his Nafta partners would pay a bigger price if there’s no agreement.

Dizzying Reversals

“If a deal isn’t made, that would be a very bad thing for Canada and it would be a very bad thing for Mexico,” Trump said. “For the United States, frankly, it would be a good thing. But I’m not looking to do that. I’m not looking to play that game.”

Foreign Affairs Minister Chrystia Freeland said Sunday that Nafta talks are continuing, and that Canada believes “economic common sense will prevail” in the end. Freeland told reporters in Quebec City that she had a constructive meeting at the G7 with Lighthizer, and would speak with him again on Sunday.

Parsing Trump’s statements on Nafta can by dizzying. On Friday, he reiterated a threat to quit the existing pact altogether if he doesn’t get his way, only days after Kudlow said Trump wouldn’t walk away.

And after the Trudeau meeting Friday, the White House released a statement saying “the two leaders and their delegations are close to a deal,” while Lighthizer said a few weeks ago that the nations are “nowhere near close to a deal.”

Trump has long stated a preference for two-way trade accords. He and Trudeau discussed the notion of a bilateral deal when they met Friday, according to a White House statement. They also discussed speeding up talks and the future of Nafta, a Canadian government official said late Friday. Canada is focused on maintaining a trilateral pact, the official said.

The window to pass a deal in this Congress has almost certainly closed, observers say, and Mexico will elect a new president on July 1. That means the Nafta process -- negotiating a deal, and then passing it in each country -- is almost certain to run into 2019.

--With assistance from Toluse Olorunnipa, Jennifer Epstein and Ben Brody.

To contact the reporter on this story: Josh Wingrove in La Malbaie at jwingrove4@bloomberg.net

To contact the editors responsible for this story: Sarah McGregor at smcgregor5@bloomberg.net, Ros Krasny, Mark Niquette

©2018 Bloomberg L.P.