Grassley Seeking 'Any Way to Move Ahead' With New NAFTA

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, is now saying it's not his stubbornness on getting Mexican and Canadian retaliatory tariffs lifted that stands in the way of the Senate ratifying the new NAFTA. He said he's looking for "any way of moving ahead," but added, "let’s just assume that Chuck Grassley said that we ought to go ahead, regardless of whether the tariffs come off, it isn't going to happen. ... You're never going to get the 51 votes through the United States Senate" in that scenario, he said.

Grassley, who was speaking with reporters on a conference call May 7, said President Donald Trump did not give any hints of how he would proceed on the existing Section 232 tariffs on Canada and Mexico -- the reason for those retaliatory tariffs -- nor on Section 232 tariffs on imported autos or auto parts. Grassley and other pro-free-trade Republican senators met with the president on Thursday.

Mexican Undersecretary for North America Jesus Seade has told the Financial Times that Mexico will not ratify the agreement while the steel and aluminum tariffs are in place. This week, he told Politico that the Mexican labor reforms are every bit as strong as Democrats could wish for, and that Mexico will not reopen the text to insert new language on enforcement. When asked about Seade's stance by International Trade Today, Grassley said he agrees with Seade that the agreement should not be opened up. "We'll never have any credibility if the United States said, we gotta sit down with Mexico and Canada again," Grassley said. "I wouldn't preclude the fact that there could be some side letters or annexes to the agreement that might bring about greater enforcement."

But House Speaker Nancy Pelosi, who determines whether the deal proceeds or not, has said over and over again, that a side letter won't do it. She said Democrats have not agreed yet on what more they need on enforcement, at a press conference last week. "There’s different suggestions, but I say it has to be part of the agreement, it can’t be a sidebar, a side letter or later legislation, or anything like that," she said (see 1905020053).

Grassley also reacted to the setback in China talks and the announcement of higher Section 301 tariffs on List 3. "We’ve got to get these negotiations right, and we have to applaud Trump being the first president to call out China on bad behavior and bring them to the negotiating tables so that we have freer trade," he said. The retaliation from China because of U.S. tariffs has hurt commodity prices on soybeans, a major Iowa crop. "When all the dust settles over these negotiations or these tariffs, we have to show that these were worthwhile negotiations, not repeat 2011," Grassley said, saying that Chinese didn't carry out what they said they would then. "I urge the Chinese negotiators to bring these negotiations.... to a successful close so we can avoid prolonged tariffs which we know have an impact on the U.S. economy."