Steel tariffs may lift when USMCA signed, new Mexican foreign minister says

The U.S. is expected to lift its steel and aluminum tariffs when a new North American trade deal is signed, Mexico's incoming foreign minister said Monday.

MarceloEbrardspoke to reportersfollowingtalks today with Foreign Affairs Minister Chrystia Freelandin Ottawa. Sevensecretaries-designates from incoming Mexican presidentAndresManuel LopezObrador'sgovernment were meetingwiththeir Canadian counterparts.

Freelandconfirmed the pairdiscussed the tariffs. She said she'd "love them to be lifted today" but did not directly answer a question put to both ministers about when theyexpectthe Americans to drop their 25 per cent levy on steel and 10 per cent levy on aluminum products.

U.S. President Donald Trump and other members of his administration have spoken of the tariffs being useful leverage in trade negotiations, as well as a good source of government revenue. But now that a revisedU.S.MexicoCanada trade agreement has been reached, the Americans have made no commitments about whenthe tariffs could end, or what the criteria would be for ending them.

"I think that might occur when the agreement is signed," Ebrardsaid in Spanish. He did not say why he believes that to be the case.

The USMCA is expected to be signed Nov. 30 the earliestpossible date, according tothe U.S. Congressional timetable, following a required60-day period from the date its text was posted(Oct. 1). That'salso the last day currentMexican President Enrique PeaNieto is in office.

PeaNieto'sministers presided over the renegotiation of the North American Free Trade Agreement, and although the incoming government has said it will honourthe terms negotiated, all parties have said they'd like the deal to be signed before Lopez Obrador'sgovernment issworn in Dec.1.

Suggestions that the Trump administrationwanted to hold a symbolic three-country ceremony for the USMCAearlier than late November have been rebuffed by both Canadian and Mexican officials, who have insisted their focus is on getting the tariffs lifted first.

U.S. Trade Representative Robert Lighthizer and Freelandhave both said talks to lift the tariffs are on a "separate track" from the USMCAnegotiations.

Freelandrepeated that Canada sees the tariffs as"unjustified and illegal" according to international trade rules, and is challenging them at both the World Trade Organization and through NAFTA's existing dispute settlement provisions.

While she wasn't as definitive as Ebrard, Freeland did say that it's "quite reasonable" to think that there's momentum building in favour of liftingthe tariffs between the North American trading partners.

Both Freeland and Ebrarddenied the suggestion that signing on to the final USMCAtext under current circumstances made it easier for the U.S. to use national security as justification for future tariffs.

The Mexican delegation is touring Montreal, Toronto and Guelph, Ont., for meetings with provincial governments and various private-sector representatives.In addition toEbrard, the future secretariesforinterior affairs, economy, environment, energy,finance and agriculture are also on thistour.

The group met privately with Prime Minister Justin Trudeau laterMonday afternoon.

LopezObradorwon Mexico'sJuly 1 election with 53 per cent of the popular vote.His party Morena, the National Reconciliation Movementis a left-leaning social democratic movement with nationalist economic policies. It formed a coalition with a leftist workers' party and theevangelical (socially conservative) 'social encounter party' to win power.

While it has backed away from extreme nationalist positions, Lopez Obrador's platfomfocused on populist appeals: empowering the underprivileged, alleviatingpoverty and violence and eliminating corruption among the political and business elites that Lopez Obrador called Mexico's "mafia of power."

The incoming administration is expected to pay particular attention to the needs of rural Mexicans, making potentially transformative changes insectors like agriculture.

Tensions remain over steel

Canada's relationship with the outgoing Mexican administration became fraught in the final weeks of NAFTAtalks, asMexico agreedto a bilateral deal with the Americans in August that put Canada under pressure to sign on before the end of September.

The newUSMCAtrade deal attempts to preserve the integration of North American automotive supply chains, including its integrated steel industry.

A week ago, Mexico's outgoing economy secretary Ildefonso Guajardo telephoned Freeland to express frustration over newsurtaxes Canada is about to levy on $200 million worth of two kinds of Mexican steel exports.

Mexico believes that Canada's decision to impose emergency safeguards on energy tubular (pipeline) products and wire rod undermines its argument that its steel exports are fairly priced, despite differences in labour standards and wages across the three countries.

The U.S. hasdemandedexport quotas from Canada and Mexico in return for theremoval of the tariffs, something Freeland has appeared to rule out, despite other reports suggesting the industry was being consulted on what kind of restrictions it could accept.

In an interview with CBC News last weekend, Freeland said two countries want to move their bilateral relationship "beyond the NAFTA talks" and get "off on the right foot."

She told Chris Hall, host of CBC Radio'sThe House: "As far as we know, Canada is the only country that this Mexican team is coming to meet with, and we're very much looking forward to welcoming them."

Freelandcharacterized Mexico's incoming government as progressive and said it had strong ties with civil society groups in Canada.

On Monday, Ebrardsaid in Spanish that he hoped the two countries would turnover a new page in the history of their bilateral relationship. In addition to trade issues, the pair discussed cannabis legalization, climate change policies and the protection of human rights.