Trudeau says NAFTA negotiations stalled after Pence demanded sunset clause

Trudeau says NAFTA negotiations stalled after Pence demanded sunset clause
© Greg Nash

Canadian Prime Minister Justin Trudeau said on Thursday that NAFTA negotiations with the U.S. broke down after Vice President Pence demanded that he agree in advance to a five-year "sunset" provision.

Trudeau said at a news conference that he was prepared to travel to Washington this week to put the finishing touches on a reworked deal when he received a phone call from Pence, who insisted that any deal must expire after five years.

"I got a call from Vice President Pence on Tuesday in which it was impressed upon me that there was precondition for us being able to get together — that Canada would accept a sunset clause for NAFTA," Trudeau said.

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"I had to highlight that there was no possibility of any Canadian prime minister signing a NAFTA deal that included a five-year sunset clause, and obviously the visit didn’t happen."

A White House official told The Hill that the Trump administration "wanted clarity on" several issues, including a sunset clause, before U.S. officials met with Trudeau.

The official said Trudeau initially talked to President TrumpDonald John TrumpArizona GOP Senate candidate defends bus tour with far-right activist Alyssa Milano protests Kavanaugh in 'Handmaid's Tale' costume Bomb in deadly Yemen school bus attack was manufactured by US firm: report MORE on Friday, before calling Pence on Monday. The vice president returned the Canadian premier's call Tuesday, when he "raised preliminary issues" that would have to be addressed before a final deal could be reached.

Throughout Pence's communications with Trudeau, he was in touch with Trump and U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerMcConnell urges GOP senators to call Trump about tariffs Companies brace for trade war MORE, the official said, noting that the three men were "on the same page."

Despite Trudeau's claim that Canada had reached an impasse with the U.S. in NAFTA talks, the official said the U.S. would continue to pursue negotiations, acknowledging that a "range of issues remain."

Canada and Mexico have both opposed the notion of a sunset clause for NAFTA, arguing that it would do away with assurances for businesses and make regulatory compliance difficult.

Still, the decision to scrap Trudeau's proposed trip to Washington signaled the latest hiccup in months of intense negotiations to rework NAFTA — a deal from which Trump has repeatedly threatened to withdraw. 

The latest back-and-forth between Trudeau and the White House came as the Trump administration imposed stiff tariffs Thursday on steel and aluminum imports from Canada, the European Union and Mexico, prompting threats of retaliatory duties on U.S. goods. 

Trudeau rebuked the U.S. tariffs following the announcement, insisting that Canada had no choice but to fight back.

"We have to believe that at some point their common sense will prevail," he said. "But we see no sign of that in this action today by the U.S. administration."

In a statement issued to reporters on Thursday night, the White House said that it had communicated to Trudeau that Trump would agree to nothing less than “a fair deal” on NAFTA.

“The United States has been taken advantage of for many decades on trade. Those days are over,” the White House said. “Earlier today, this message was conveyed to Prime Minister Justin Trudeau of Canada: The United State will agree to a fair deal, or there will be no deal at all.”

Updated: 9:39 p.m.