US President Donald Trump is pushing for a conclusion to the renegotiation of the North American Free Trade Agreement (NAFTA).
CBC reports, “Foreign Affairs Minister Chrystia Freeland is expected to go to Washington this week for late-stage talks with U.S. Trade Representative Robert Lighthizer on the fate of NAFTA, CBC News has confirmed. The window for reaching a deal on a renegotiated NAFTA is becoming increasingly narrow, with both the U.S. and Mexico facing potentially fractious election campaigns that could derail the talks.”
The Globe and Mail adds, “[Mexican Economy Minister Ildefonso] Guajardo said on Tuesday the United States wants a ‘quick solution’ on NAFTA so that leaders of the three countries can sign a pact at the Summit of the Americas on April 13 and 14 in Peru.” And less than two weeks ago, Bloomberg reported, “Trump has put new pressure on NAFTA negotiations with an order saying he’ll impose steel and aluminum tariffs on Canada and Mexico on May 1 if he’s not satisfied with talks.”
As such, it seems that an announcement of a new deal is possible even likely.
Toronto Star columnist Thomas Walkom comments, “If so, we may finally get some idea of how much Canada and Mexico are willing to surrender in order to keep their privileged access to the U.S. market. … An agreement in principle should provide a good approximation of the concessions each party is prepared to make.”
In terms of Trump’s demands, we would see if the Trudeau government agreed to:
1- an end to supply management on milk, cheese and poultry or more likely an increase in US dairy exports into Canada
2- a five-year termination clause on NAFTA or more likely an assessment provision
3- a cap on Canadian companies receiving US government contracts
4- the removal of Chapter 11 (investor-state dispute settlement) and Chapter 19 dispute panels
5- making Chapter 20 state-to-state panels advisory
6- stopping mandatory labelling on foods high in sugar, sodium and saturated fat
7- a 12-year patent-style protection mechanism for biologic medicines
The Globe and Mail comments, “People familiar with Canada’s strategy said Ottawa is happy to strike a quick deal, but the United States will have to make concessions if this is to happen.”
If the Trudeau government wanted to exercise that leverage those ‘concessions’ would include:
1- removing the de facto mandatory oil and gas export provision known as energy proportionality (rather than the provision being expanded to include Mexico)
2- removing water as a tradable good, service and investment from the deal
3- pushing for the removal of the Chapter 11 investor-state provision (rather than continuing to argue in favour of it)
4- incorporating the United Nations Declaration on the Rights of Indigenous Peoples and the right to free, prior and informed consent into the body of the deal
5- stop pushing for ‘regulatory review’ language that threatens regulations on food as well environmental protections
Fundamentally, the Trudeau government should also consider delaying agreeing to a deal until a new Mexican president is sworn into office on December 1 following the July 1 election. The rush to sign a NAFTA 2.0 in the last weeks of current Mexican president Enrique Peña Nieto’s term appears to be both unseemly and undemocratic, especially since the leading candidate Andres Manuel Lopez Obrador has said, “Hopefully nothing is signed until the after the election”.