Labor boss Trumka says any new NAFTA deal must include Canada

Following a firm warning by President Trump to the United States’ neighbor to the north, the president of the largest union federation in the country said Sunday that given the integration of the three economies in the agreement, any reworked deal on the North American Free Trade Agreement must include Canada.

AFL-CIO President Richard Trumka said that while his federation is anxious to have NAFTA reworked – calling the 1994 agreement “devastating” to American workers – any deal that only includes the U.S. and Mexico is unfeasible.

“Our economies are integrated,” Trumka said on “Fox News Sunday.” “It’s hard to see how that would work without Canada on the deal.”

Trumka’s comments come after Trump warned Canada on Saturday that it "will be out" of a revised NAFTA deal unless it's "fair" to the U.S., and threatened to scrap the current deal should Congress "interfere" with the negotiations.

"There is no political necessity to keep Canada in the new NAFTA deal," Trump said in one of a series of tweets as he visited his Virginia golf club over the weekend.

It's not clear, however, whether the Trump administration has the authority to strike a deal with just Mexico, as it announced Monday, and exclude Canada. Also, Congress must approve any rewrite of NAFTA, signed under President Bill Clinton, and might refuse to endorse a deal that leaves longtime ally Canada on the sidelines.

The 24-year-old NAFTA tore down most trade barriers dividing the United States, Mexico and Canada. Trade between the three countries surged. But many manufacturers responded to the agreement by moving factories south of the border to take advantage of low Mexican wages, then shipping goods north to the United States and Canada.

Trump has charged that the deal wiped out American factory jobs. He has pledged to negotiate a better deal or withdraw from NAFTA altogether. Talks on a new trade deal began a year ago, but got bogged down over U.S. demands, including some meant to return manufacturing to the United States.

A few weeks ago, the United States began negotiating with Mexico, leaving Canada on the sidelines. Outgoing Mexican President Enrique Peña Nieto wanted to sign a deal before he left office Dec. 1. The deal announced Monday would, among many other things, require that 40 percent to 45 percent of a car be made in a North American country where auto workers made at least $16 an hour — that is, not in Mexico — before qualifying for duty-free status.

Talks to keep Canada in the trade bloc are to resume this coming week as Washington and Ottawa try to break a deadlock over issues such as Canada's dairy market and U.S. efforts to shield drug companies from generic competition.

"As we've said all week, we're working toward a modernized NAFTA that is good for the middle-class and people working hard to join it," said Adam Austen, a spokesman for Canadian Foreign Minister Chrystia Freeland. "With good will and flexibility on all sides, a win-win-win outcome is achievable. Canada, of course, will only sign a deal which is good for Canada."

Echoing Trumka’s words about the need to include Canada in any revised deal, Gary Shapiro, president and CEO of the Consumer Technology Association, said that any new agreement must include all three countries.

“We’re encouraged by the open dialogue between the Trump and (Mexican President Enrique) Peña Nieto administrations, working toward a modernized trade agreement that recognizes the technology sector’s critical role in American economic growth,” Shapiro said in a statement. “At the same time, we are concerned that excluding Canada from a final agreement will limit our export opportunities and hurt the U.S. economy.”

The Associated Press contributed to this report.