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#1 – TRUMP REMARKS POINT TO LONGER NAFTA NEGOTIATION TIMELINE

In an interview with the Wall Street Journal last week, President Trump suggested that NAFTA withdrawal is off the table until after the Mexican elections on July 1st. Here’s the key section of the transcript:

"WSJ: (Re NAFTA) Do you have a timetable on that? I know there’s another round of talks coming up here this month.

Mr. Trump: No, but, you know, I’m leaving it a little flexible because they have an election coming up. So I understand a lot of things are hard to negotiate prior to an election. They have an election coming up fairly shortly, and I understand that that makes it a little bit difficult for them, and I’m not looking to make the other side—so we’ll either make a deal or—there’s no rush, but I will say that if we don’t make a fair deal for this country, a Trump deal, then we’re not going to have—then we’re going to have a—I will terminate."

But Mexico isn’t the only NAFTA partner with a difficult political timeline ahead, and most trade watchers now believe that withdrawal is off the table until after the 2018 midterms. That likely means a protracted negotiation that could last through the 2018 calendar year. It’s also remains possible that there will be an agreed upon cooling off period or outright suspension of negotiations in 2018.

#2 - CANADIANS WELCOME LONGER NAFTA NEGOTIATION TIMELINE

Canada’s lead NAFTA negotiator Chrystia Freeland welcomed the President’s comments and the suggestion off a longer negotiating timeline according to a Reuters report. Freeland said:

“We have always felt that imposing artificial deadlines was not necessary from the Canadian standpoint ... I thought that was a constructive proposal from the president.”

Reuters also cited a Canadian source as saying that “officials had been talking informally for weeks about the possibility of suspending the process this year but stressed no decisions had been made.”

What we hear: While a cooling off or suspension seems likely at some point later this year, it’s also likely that another round of negotiations in Mexico will be announced at or before the upcoming Montreal round.

#3 - TRUMP SUGGESTS NAFTA RENEGOTIATION COULD PAY FOR WALL

In the same Oval Office interview with the Journal, Trump also suggested that NAFTA renegotiations could somehow be used to pay for his long-promised border wall with Mexico.

“They can pay for it through, as an example, they can pay for it indirectly through NAFTA. OK? You know, we make a good deal on NAFTA, say I’m going to take a small percentage of that money and it’s going to go toward the wall. Guess what? Mexico’s paying. Now Mexico may not want to make the NAFTA deal and which is OK, then I’ll terminate NAFTA…which I think would be frankly a positive for our country. I don’t think it’s a positive for Mexico, I don’t think it’s a positive for the world. But it’s a positive for our country because I’d make a much better deal. There is no deal that I can make on NAFTA that’s as good as if I terminate NAFTA and make a new deal. OK? But I feel that we have a chance of making a reasonable deal, the way it is now.”

#4 – SENATOR PAT ROBERTS SEES PRESIDENT TRUMPS NAFTA RHETORIC SOFTENING

After repeated meetings with ag state Republican Senators, President Trump is now seeing “the bigger picture” on NAFTA withdrawal according to Senate Ag Committee Chairman Pat Roberts. Roberts credited the White House meetings and pressure from farmers who Trump considers “his people.”

The President’s softening rhetoric was on display in the President’s speech to the Farm Bureau Convention in Nashville where the President left out his normal heated NAFTA threats. According to Inside U.S. Trade’s Jenny Leonard Trump even used suggested lines in the speech from Senator Roberts.

#5 - SENATE FINANCE DEMS ANGERED BY LACK OF TRANSPARENCY

The public is being kept in the dark on the Trump administration’s intentions in renegotiating the South Korea-U.S. (KORUS) according to ten Senate Finance Committee Democrats who wrote to President Trump last week. The source of most of their frustration is the fact that the U.S. has now begun KORUS renegotiations without providing Congress with the 90 day notification required under Trade Promotion Authority or any other consultations.

The Senators also cited their frustrations with the lack of information on several reports the Trump administration has promised but not yet produced. Read more HERE.

#6 - 90 DAY CLOCK BEGINS ON STEEL TRADE ACTION?

Late last week the Commerce Department sent a required report to the White House on whether steel imports present a national security threat. The delivery of the report begins a 90 day clock for President Trump to decide whether to impose tariffs, quotas, or a combination of both.

U.S. Steel welcomed the news saying: “With the completion of the Department of Commerce’s investigation, United States Steel Corporation encourages President Trump to take swift and decisive action. Our nation cannot afford to allow the continued rise of foreign imports that undermine America’s capacity to produce the steel necessary for our country’s national and economic security.”

#7 – MONUMENT’S OWN T.A. HAWKS MAKES THE CASE FOR GREGG DOUD AS AG NEGOTIATOR

Read Monument Partner T.A. Hawks’ case for confirming the Trump administration’s pick for chief ag negotiator in The Hill this week. According to Hawks:

“USTR needs an effective point person to focus on farmers, and rural America needs to have their concerns heard and be considered alongside all other industries in this and future trade negotiations. Gregg Doud is that person and the Senate should confirm him.”

BONUS: READ FT TRADE REPORTER SHAWN DONNAN'S SEVEN PREDICTIONS FOR GLOBAL TRADE POLICY IN 2018:

Prepared by Matt McAlvanah (matt@monumentpolicy.com) and the Monument Trade Team

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