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‘Pretty Close’ to Deal on NAFTA Sunset Clause, Trump Says at G-7

LA MALBAIE, Quebec –– President Donald Trump said Saturday that NAFTA negotiators are “pretty close” to agreeing on some kind of sunset clause, a sticking point in talks, while warning the three-way agreement can survive only if major changes are made.

“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 before leaving the Group of 7 leaders’ meeting. Otherwise, “we’re going to make a deal directly with Canada, directly with Mexico.”

The North American Free Trade Agreement was a key topic when Trump met Friday with Canadian Prime Minister Justin Trudeau. Trump said later that they had a “very, very good meeting on NAFTA.” An effort last month to reach a deal that could pass the current U.S. Congress by year-end has stalled, in part after Trudeau’s final push ran up against Trump’s insistence on a five-year sunset clause under which the deal would be renegotiated or killed after five years.

Any NAFA deal will have a sunset provision, Trump said Saturday, though he indicated that some people are pushing against a five-year expiration. “We’re pretty close on the sunset division,” he said.

The president also signaled that the U.S.’ NAFTA partners would pay a bigger price if there’s no agreement.

“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.”

Parsing Trump’s statements on NAFTA can be dizzying. On Friday, he reiterated a threat to quit the deal altogether if he doesn’t get his way, only days after White House economic adviser Larry 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 on NAFTA,” while U.S. Trade Representative Robert 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 agreements. He and Trudeau discussed the notion of a bilateral deal when they met Friday, according to a White House statement.

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.

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