Fox News "Sunday Morning Futures" - Transcript: Interview with Rep. David Schweikert

Interview

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BARTIROMO: Welcome back.

President Trump praising Mexico for making progress on a trade deal with the U.S. The two countries have been in talks to renegotiate the North American Free Trade Agreement, NAFTA.

But the president's message to Canada is a bit different, decidedly less friendly. The president tweeted this: "Deal with Mexico is coming along nicely. Auto workers and farmers must be taken care of, or there will be no deal. New president of Mexico has been an absolute gentleman. Canada must wait. Their tariffs and trade barriers are far too high. Will tax cars if we can't make a deal."

Arizona Republican Congressman David Schweikert is with me now. He's a member of the House Freedom Caucus, House Ways and Means Committee, and the U.S. Congress' Joint Economic Committee.

Congressman, it's good to see you this morning. Thanks so much for joining us.

REP. DAVID SCHWEIKERT, R-ARIZONA: Good morning.

BARTIROMO: How close are we with the deal to -- with Mexico?

SCHWEIKERT: Every moment, I get optimism, but there's still a number of very technical steps that must be made through.

But everything we're picking up on the Ways and Means Committee is, we're making genuine progress with Mexico. And Mexico has been an honest negotiator.

Where there's still some frustration with Canada -- Canada, as you know, last -- earlier in the year sort of engaged in a charm offensive, but not necessarily quality negotiations.

BARTIROMO: Yes.

I mean, we all know that China has been stealing from the U.S. for decades, in terms of forcing this transaction of forcing technology transfer to Chinese companies, not opening up their markets to foreigners, as well as just out and out stealing intellectual property.

Do you think a stronger U.S., with allies, Mexico, perhaps the E.U., would bode well for the U.S. dealings with China?

SCHWEIKERT: Maria, you're asking the most brilliant question that almost no one has really written about.

Quick thought experiment. Think about what the president accomplished with Europe a couple of weeks ago. Now if we were able to with our most immediate trading partners, which is really important to my home state, Arizona, an agreement with Mexico -- but if you started to bring the world together, saying we're lowering barriers, we're protecting our intellectual property, now the world needs to deal with China, who is the bad actor on the world stage.

BARTIROMO: Right.

And, I mean, that was the whole issue about putting aluminum and steel tariffs on some of our allies. Some detractors of the president said, why are we fighting with our friends? Why not get everybody together to go against the big bad gorilla in the room? And that is China.

SCHWEIKERT: Look, and, as you know, on some of the metal tariffs, it's a little more complicated, because there's something called transshipment, where it may come from the massive overcapacity in China, ship through other countries.

But it looks like we're actually making progress with our European allies, now hopefully with Mexico, and hopefully Canada will come in and being an honest negotiator.

But if we can accomplish this, if we can sort of bring the world together to deal with the overcapacity, the stealing, the other things that China is the great sinner of, I think you need a world vs. China to actually make everyone, shall we say, operate fair in a world trade system.

BARTIROMO: Right.

Well, I will tell, if a deal with Mexico is at hand over the near-term, this would impact markets, this would impact a lot, because markets and investors and even supporters of the president want to see another deal. I know one deal was done with South Korea.

So tell us what the sticking point is at this point.

SCHWEIKERT: Well...

BARTIROMO: Is it still the auto origination, where is a vehicle originated, produced, in the U.S. or Mexico? Is that one of the sticking points still?

SCHWEIKERT: Well, I can't tell you -- I can't tell you all the sticking points.

But, first, from sort of being from the Desert Southwest, we have an incredible trading relationship with Mexico. And it's important. It's the way -- the complication of modern supply chains. So it would also be good for the continued growth in Arizona.

But there were a number of sticking points, percentage of an automobile, how much would be considered content, U.S. content. And how do you do that calculation?

BARTIROMO: Right.

SCHWEIKERT: Everything we're being told is, we're making progress, because it turns out it's complicated.

There's some parts, believe or not, that go back and forth across the border multiple times.

BARTIROMO: Right, exactly.

SCHWEIKERT: So how do you do those calculations?

And then there's some other things of, how do you protect investments? Should you have very robust access to arbitration, instead of having to defend your investments in a Mexican court system? So there's a number of those things.

And, hopefully, they're getting wrapped up.

BARTIROMO: And, realistically speaking, would you expect to deal with Mexico before the midterms, for example?

SCHWEIKERT: I don't know.

BARTIROMO: Don't know.

SCHWEIKERT: I can be hopeful, because I know, for some of the negotiators, there was an intent to try to have a package put together before Mexico changes its government.

BARTIROMO: Right.

SCHWEIKERT: But, apparently, the president is demonstrating a certain warmness to the incoming administration in Mexico.

But it's still, I think, from just who you're negotiating with, it would be rational to try to get a package done before that transition.

BARTIROMO: Congressman, it's good to see you, sir. Thanks so much.

SCHWEIKERT: Thanks.

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