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Canadians brace to make NAFTA concessions, still no public consultations planned

NAFTA messaging – Trudeau speaks to US oil and gas executives in Houston telling them a border adjustment tax on tar sands exports could hurt 460,000 jobs in Texas. Trudeau argued:  “Nothing is more essential to the U.S. economy than access to a secure, reliable source of energy. Canada is that source.”

On the upcoming renegotiation of the North American Free Trade Agreement (NAFTA), US Commerce Secretary Wilbur Ross recently stated, “The Mexicans know, the Canadians know, everybody knows. They all know they’re going to have to make concessions. The only question is what’s the magnitude, and what’s the form of the concessions.”

Now, a new Angus Reid poll suggests Canadians expect to have to make concessions in the upcoming NAFTA talks.

The Financial Post reports, “The majority of respondents in most provinces said Canada should be prepared to make concessions in the hopes of maintaining a positive relationship with the U.S., with only B.C. and Ontario residents more likely to say Canada should refuse to give in to unfavourable terms. Canadians [also] don’t trust Trump to treat Canada gently in upcoming NAFTA re-negotiations. One-third of respondents said they believe Trump’s claim that Canada won’t be much affected. The remaining two-thirds agreed with the statement: ‘We can’t count on better treatment for Canada — he can so easily change his mind’.”

The concessions Canada makes are likely to include the dairy sector.

The Globe and Mail reports, “When Mr. Trump comes looking for concessions from Ottawa, you can bet dairy will be near the top of his NAFTA 2.0 hit list. The Trump administration knows that Ottawa is willing to give something on dairy – if only to protect other sectors, such as auto, steel and energy.”

That article adds, “[Dairy] has been a frequent target of US trade complaints, even before Trump. And unlike other vulnerable Canadian sectors, it has few natural allies in the United States and a long list of enemies from big dairy-producing states, including House speaker Paul Ryan of Wisconsin and Senate Democratic leader Charles Schumer of New York. Canada had agreed to give up 3 per cent of its domestic dairy market in the Trans-Pacific Partnership. It’s reasonable to assume Mr. Trump’s negotiators will want even deeper concessions in NAFTA talks.”

Earlier news reports have also suggested that the Trump administration will be seeking concessions on rules of origin for tariff-free vehicles (which could mean reducing the import of car parts from Canada for cars manufactured in the United States) and on the investor-state dispute settlement provision (which the US sees as unfavourable to them even though they have never lost a challenge while Canada and Mexico have paid out almost $375 million in lost or settled claims).

Meanwhile, the Trudeau government is attempting a charm offensive in the United States to convince Americans that trade is good for them.

CTV reports, “The federal government is stepping up its diplomatic efforts in key American states over the next three months to make sure the Trump administration can’t escape its message about the importance of trade with Canada, a senior government official tells CTV News. Experts have advised the federal government to engage politicians and influential people outside Congress and the White House in order to make their case that bilateral trade is vital to both countries’ economies, and let Americans in turn apply pressure not to take drastic measures when it comes to changing the trade relationship.”

The trips include Trudeau’s recent visit to Texas to speak at a corporate oil and gas conference, Trudeau going to see a musical in New York City this week about Canadians welcoming Americans after 911, and trips to Iowa, Pennsylvania, Ohio, Wisconsin (home state of House Speaker Paul Ryan), Michigan, Indiana (home state of US vice-president Mike Pence), Florida, New York, California, and Kentucky.

No such similar efforts are underway to try to gauge what communities and First Nations across Canada think about NAFTA (about concessions in the dairy sector to protect the auto, steel and energy sectors,, on what ‘red lines’ cannot be crossed in the talks, what should be taken out of the deal), though the Canadian Press reported last week that the Trudeau government is “consulting with the private sector” in advance of the talks.

To demand a public consultation prior to start of the NAFTA talks, please join with the 10,000 people who have already sent a message through this online action alert to Trudeau.

The renegotiation of NAFTA could begin as early as mid-June or at some point later this year.