Top Stories
Top Stories
Politics

US-Mexico-Canada trade deal is 'crucial' for future negotiations and needs to get approved: GOP congressman

Key Points
  • The North America trade pact has "gold-standard type of language" that can be applied to deals with China and other countries, says Rep. Tom Reed.
  • "Getting this on the books is really critical for the future trade negotiations for America," he says.
VIDEO4:5604:56
We will always be dealing with enforcement of new trade agreements: Rep. Reed

The trade deal between the United States, Canada and Mexico is crucial for future trade agreements and needs to be "put on the books," Rep. Tom Reed, R-N.Y., told CNBC on Thursday.

In fact, it was that deal — and not China negotiations — that was the main focus of a meeting between lawmakers and U.S. Trade Representative Robert Lighthizer on Thursday. "The priority is to get Mexico-Canada done," said Reed, co-chair of the Bipartisan Problem Solvers Caucus, the group that met with Lighthizer.

The trade agreement between the three nations sets the stage for future deals, Reed said on "Power Lunch. "

It has "gold-standard type of language" that can be applied to agreements with China and other countries, he said. "Getting this on the books is really critical for the future trade negotiations for America."

The leaders of the three nations signed a revised North American trade pact — known as USMCA — in November. It replaces the North American Free Trade Agreement, but it still needs to be approved by both chambers of Congress before it can go into effect. It also needs to be ratified by lawmakers in Mexico and Canada.

"If we don't pass it, not only is it going to hurt American industry but Canada and Mexico will see a significant impact — potentially recession type of results," Reed said.

Tariffs

With the agreement not yet finalized, tariffs are still in place. Last year, President Donald Trump slapped duties on aluminum and steel imports from several nations, including Mexico and Canada.

Mexican Deputy Economy Minister Luz Maria de la Mora told Reuters last week that if the U.S. doesn't repeal those tariffs, Mexico would have a revamped list of U.S. targets ready in about two months.

"We're carrying out an evaluation and there are products from the agricultural sector — we're probably going to bring in some new ones and take some others out — as well as in the industrial sector and the steel industry," de la Mora said in the interview.

Reed said he believes there will be a resolution on tariffs. "We'll thread this needle, and these tariffs will be something we can take care of and move forward from."

As for whether there are future trade skirmishes on the horizon once a deal with China is reached and the USMCA is finalized, Reed said, "We will always be dealing with enforcement of these new trade agreements."

That's why it is crucial to make sure there are structures in place in any negotiated trade agreement with China so the U.S. can enforce the provisions, he said.

China and the U.S. appear to be getting close to an agreement, sources recently told CNBC. Negotiations are in the "final stages " and could end this month, those sources said.

— CNBC's Kayla Tausche and Fred Imbert contributed to this report.