U.S President Donald Trump watches as Turkey's President Recep Tayyip Erdogan departs at the entrance to the West Wing of the White House in Washington, on May 16, 2017.JOSHUA ROBERTS/Reuters
Prime Minister Justin Trudeau may not be gloating, but the scandal engulfing Donald Trump is good news for Canada.
The U.S. President has been Ottawa's worst nightmare in recent months. He has angrily attacked Canadian dairy and lumber practices, threatened to rip up the North American free-trade agreement and rattled the business community with his "Buy American, Hire American" mantra.
For now, it's business as usual on the trade front in Washington. Mr. Trump's newly confirmed top trade official, U.S. Trade Representative Robert Lighthizer, formally notified Congress last week that the administration intends to renegotiate NAFTA – or modernize it, as he put it. That sets in motion a 90-day consultation period with Congress and stakeholders, followed by the start of negotiations with Canada and Mexico as early as August.
But launching negotiations is a long way from getting a final deal. And with Mr. Trump in the crosshairs of a U.S. Justice Department probe, the NAFTA renegotiation could be relegated to the slow track.
A weakened president has less leverage with Congress to take a hard line on trade. And the Trump administration must work closely with Congress throughout the process, under the legislation that gives a president the power to negotiate trade deals.
"With an embattled President, that will largely shut that process down," said Dan Ujczo, an international trade lawyer with law firm Dickinson Wright in Columbus, Ohio.
The Trump administration can move ahead with consultations and even begin negotiations. But Mr. Ujczo doubts Congress will be in the mood to go along with the President's trade agenda.
"You need to go back to Congress to approve the agreement, [and] I don't think Congress would do it," he said.
The administration is talking about getting a NAFTA deal within a year. But it will almost certainly take longer, spilling into next year's U.S. midterm elections and Mexican elections.
Mr. Trump's future is suddenly uncertain. If the investigation into links between his entourage and the Russian government in the lead-up to the 2016 election goes badly for the President, impeachment or resignation are possible. If Mr. Trump resigns, all bets are off.
"It would upend a lot of policies, including his trade policies," argued Lawrence Herman, a Toronto trade lawyer and fellow at the C.D. Howe Institute.
A lot will depend on whether key members of his economic team stay on in a post-Trump administration, including trade hardliners such as Mr. Lighthizer, Commerce Secretary Wilbur Ross and Peter Navarro, head of the White House National Trade Council.
Already the Trump administration appears to have scaled back its NAFTA ambitions. An earlier draft letter destined for congressional leaders talked about overhauling NAFTA's architecture, rethinking "the issue of trade" and reducing the U.S. trade deficit. The eight-page letter also included a long list of specific demands.
Mr. Lighthizer's letter to Congress, on the other hand, is short, vague and not overtly protectionist. He talks of a "modernization" of NAFTA and wanting "effective implementation and aggressive enforcement of the commitments made by our trading partners."
Withdrawal from the agreement appears to be off the table – for now.
Some modernization of the 1994 agreement probably wouldn't be a bad thing. Updating NAFTA, after all, was a key rationale for pursuing the now-stalled Trans-Pacific Partnership trade deal, which was signed by all three NAFTA partners. For example, NAFTA's rules never contemplated the explosion of trade in services, including digital services.
Even Canadian Foreign Affairs Minister Chrystia Freeland agrees that reopening the deal is an "opportunity to determine how we can best align NAFTA to new realities."
She also embraced the idea of "free and fair approaches to trade and investment," echoing the "fair trade" phrase often used by Mr. Ross, the Commerce Secretary.
The trouble, of course, is that one country's idea of fair trade just may look like a big, fat trade barrier to its trading partners.
And for all the talk of modernizing NAFTA, trade negotiations often get bogged down on old and traditional industries, where protectionism is more prevalent. Think agriculture, steel and natural resources.
For now, Mr. Trudeau and his team can take some comfort that Mr. Trump's rage is directed elsewhere. They may even be quietly hoping his days in the White House are numbered.
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