Skip to content

5th round of NAFTA talks end in stalemate, 6th round scheduled for January 23-27 in Montreal

Photo of our protest at the start of the 4th round of NAFTA talks in Ottawa, September 2017.

The fifth round of NAFTA talks concluded in Mexico City earlier today. In short, it would appear that no ‘progress’ was made on any key issues.

This is notable because the three countries have given themselves the extended deadline of March 31, 2018 to reach a deal, with only two more rounds of formal talks left, the penultimate round being January 23-27, 2018 in Montreal.

The Financial Post reports, “The fifth round of talks has largely avoided the most divisive U.S. proposals on dairy, automotive content, dispute panels, government procurement, and a sunset clause.”

That news report adds, “Negotiators spent much of their time in the fifth round on rules of origin, which govern how much of a product must be produced in North America to trade without tariffs, though discussions on that centered on mundane details such as paperwork requirements.”

CBC notes, “[Canadian Foreign Minister Chrystia Freeland says] ‘significant’ sticking points include the U.S. push to change the rules of origin — which could be detrimental to the Canadian auto industry — and demands for a five-year sunset clause in the deal [adding] the U.S. position on these contentious issues, which were introduced in earlier rounds of negotiations, are largely unchanged.”

That article says, “Much of the ‘good progress’ achieved at the latest negotiations in Mexico were on areas highly technical in nature. She said the three parties agreed to provisions on anti-corruption and good regulatory practices, telecommunications, areas relating to sanitation, and customs and trade facilitation.”

Furthermore, Reuters reports, “The United States is still waiting for Canada and Mexico to make counter-proposals on major U.S. NAFTA demands, including on autos and dispute settlement mechanisms, to move renegotiations forward, a senior U.S. government official said on Tuesday. The official told reporters that progress had been made during the fifth of seven rounds of talks to consolidate texts on less controversial areas, but no chapters had been closed in the past week.”

And Global News notes, “Officials and lobbyists said Mexico and Canada would firmly push back against the U.S. demand to raise the minimum threshold to 85 per cent NAFTA origin components from 62.5 per cent, as well as insist that half the content was from the United States.”

The Trudeau government has also said a ‘hard no’ to the U.S. proposal that the Chapter 11 investor-state dispute settlement (ISDS) provision be optional.

Where does this leave us? National Post columnist John Ivison has commented, “There is a growing belief in the Trudeau government that Trump’s attempts to blow up NAFTA will end up in a stalemate with Congress, ensuring that the status quo prevails.” In other words, NAFTA could remain just as it is – with Chapter 11, energy proportionality, and water as a tradable good, service and investment all intact.

The Globe and Mail notes, “There is a process in NAFTA that would allow the United States to get out of the deal. But whether Mr. Trump has the power to pull out unilaterally or whether he would have to get Congress to agree is a major legal grey area.” The Financial Post explains that while Trump “clearly has the authority to end U.S. participation in international agreements”, he does not have the authority to unilaterally repeal the NAFTA Implementation Act that puts NAFTA provisions into force. The newspaper concludes, “Under that reading, even if Trump were able to technically withdraw from NAFTA, the agreement’s trade provisions would largely remain in force.”

For a more detailed Council of Canadians overview of the issues covered in the fifth round of talks, please click here.