At a Feb. 13 White House meeting with nearly two dozen members of the House and Senate that focused on potential import restrictions on steel and aluminum (see related report this issue), President Trump and U.S. Trade Representative offered remarks that gave further insight into the status of ongoing efforts to renegotiate the NAFTA and KORUS free trade agreements.

Lighthizer suggested that the threat of the U.S. submitting a formal notice of withdrawal from NAFTA “in order to get a good agreement” has receded, stating that “we’re making real headway.” He said there are “a number of issues that we still have to work our way through” but was optimistic that securing a deal that “the vast majority of Republicans and Democrats support” is “very much in reach.”

A year ago Trump said the U.S. has “a very outstanding trade relationship with Canada” and would only need to tweak NAFTA with respect to its northern neighbor, whereas more substantive changes would be required to remedy the “extremely unfair” state of trade with Mexico, which had a record $71.1 billion trade surplus with the U.S. in 2016. However, those positions now appear to have been reversed.

Lighthizer said he felt the NAFTA talks have made progress “particularly with respect to the Mexicans,” though he did not say why. Trump, meanwhile, complained that “Canada has treated us very, very unfairly when it comes to … timber, lumber, and other things.” Canadian officials have returned the criticism, accusing the U.S. of being inflexible in the NAFTA talks and offering proposals that would weaken its neighbors.

Trump also intensified his criticism of the U.S.-Korea FTA, asserting that it has “produced nothing but losses” for the U.S. and that “it’s incompetent that somebody could have made a deal like that.” As a result, he said, his administration will “either negotiate a fair deal” with Korea “or we’re going to terminate” the existing agreement. The most recent round of talks was held Jan. 31-Feb. 1 in Seoul and there has been no further word on the time or location of the next round.

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