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7 things to know about the 3rd round of NAFTA talks in Ottawa

To read about how The Council of Canadians and its civil society allies have been challenging NAFTA in Ottawa this past week, please click here.

The third round of talks to renegotiate the North American Free Trade Agreement (NAFTA) are taking place in Ottawa now (September 23-27).

What’s the latest on these talks?

1- Timeline

While official statements have committed to concluding the talks by the end of this year (before campaigning for the July 1, 2018 Mexican presidential election begins), the Toronto Star reports, “[Unifor president Jerry Dias] predicted NAFTA renegotiation talks would end in failure after U.S. negotiators arrived Saturday for Round 3 without setting out precise demands for how exactly the Trump administration wants to boost the made-in-America manufacturing sector. ‘I’m convinced that the U.S. doesn’t want a deal, not before Christmas’. …Dias predicted the deal would come together in 2018, closer to the U.S. congressional mid-term elections in November.”

2- U.S. demands

There are also concerns that the U.S. still hasn’t been specific with its demands on a number of other fronts. Trade lawyer Lawrence Herman argues, “[Rather than purposely delaying], I would think it’s more a question of sorting out the details of what they want to ask and ensuring they’ve lined up all the various constituencies in Washington.” The Toronto Star adds, “[Canada’s chief NAFTA negotiator Steve] Verheul told reporters Saturday he did not expect the American team to lay out specific text for new ‘rules of origin’ for the auto sector during this round. And Verheul said he was ‘doubtful’ the three-way negotiations will close or sign off on a final version for a chapter on the environment either.”

3- Indigenous rights

Without providing specifics, the Trudeau government has publicly stated it supports having an Indigenous rights chapter in a NAFTA 2.0. While that may sound progressive, Trudeau has yet to commit to fully implementing the United Nations Declaration on the Rights of Indigenous Peoples or incorporating its cornerstone right to free, prior and informed consent into the new deal. Nor has he committed to this chapter trumping the investment and energy chapters, which violate Indigenous rights. The Toronto Star highlights, “There is no negotiating table devoted to another Canadian objective: a chapter to recognize Indigenous rights within a new trade agreement.”

4- A feminist NAFTA?

The Liberals have also promised a gender rights chapter in NAFTA 2.0. Former U.S. trade negotiator Wendy Cutler says, “If it’s largely aspirational and has soft commitments, with no dispute settlement and no obligation to accede to other agreements, then I think it’s something the administration would consider favourably.” The Canadian Press reports, “Several sources both in and outside of government said [the proposed chapter] is modelled after the gender chapter the Liberal government added to its free trade deal with Chile. …[That deal makes it clear that] nothing in the gender chapter could be subject to the dispute resolution mechanism that applies to the rest of the trade deal.”

5- Rules of origin and dispute settlement

The Toronto Star notes, “Two of the big U.S. priorities are up for detailed discussion only later in this round. Negotiators will do a deep dive on ‘rules of origin’ and ‘trade remedies and dispute settlement’ only on Tuesday and Wednesday.” Current rules of origin state that 62.5 per cent of autos and auto parts must be made in North America for tariff-free status. The U.S. reportedly wants that to be increased to 70 per cent, but a Scotiabank Economics report says that more than 75 per cent of vehicle parts are already made in North America. And while the Trudeau government says that the Chapter 19 state-to-state dispute settlement provision is essential, Canadian Centre for Policy Alternatives researcher Scott Sinclair has highlighted in various articles that Chapter 19 is not that important.

6- Energy chapter

The Canadian Press reports, “An agreement to have Mexico join a NAFTA clause governing oil exports may be one of the first significant products of the renegotiation talks this weekend in Ottawa. When NAFTA was originally signed 23 years ago, Mexico rejected parts of the energy chapter because its oil industry was entirely owned and operated by the government. However, President Enrique Pena Nieto is looking to solidify the reforms he started in 2013, opening up the Mexican oil industry to international investment and participation. As such, Mexico has asked to sign Article 605, which [means signatory countries] cannot reduce access to each other’s oil, natural gas, coal, electricity or refined petroleum products without an equivalent reduction in domestic access to the same product.”

7- Walk away from a bad deal

The Toronto Star also reports, “Dias is not a fan of NAFTA and wouldn’t shed crocodile tears over its demise because he believes it has favoured Mexico to the detriment of Canadian and U.S. autoworkers. He suggests a Canada-U.S. free trade agreement would be the default backstop if NAFTA fails, and that would provide better protection for workers.” According to a poll conducted for the Council of Canadians by EKOS Research, 76 per cent of respondents said we should walk away if the NAFTA negotiations are leading to a bad deal for Canadians and the environment.

The fourth round of talks are expected to take place October 11-15 in Washington, DC. The fifth round would likely be in early November in Mexico City with the sixth round back in Ottawa likely in late-November.


The Toronto Star reports that the agenda for this third round of talks is as follows:
Saturday Sept. 23: Customs, sanitary and phytosanitary measures, cross border trade in services, government procurement, digital trade, anti-corruption, environment, gender, and small and medium size enterprise, financial services
Sunday Sept. 24: customs, textiles, sanitary and phytosanitary measures, cross border trade in services, government procurement, digital trade, environment, state-owned enterprises, financial services, good regulatory practices, legal and institutional issues
Monday Sept. 25: textiles, goods, competition, telecoms, state owned enterprise, temporary entry rules, environment, good regulatory practices, technical barriers to trade, legal and institutional issues
Tuesday Sept. 26: rules of origin, goods, agriculture, energy, investment, intellectual property, telecoms, temporary entry, labour, technical barriers to trade
Wednesday Sept. 27: rules of origin, agriculture, investment, intellectual property, trade remedies and dispute settlement, labour, sectoral annexes