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Notice to renegotiate NAFTA to be issued within days

Wilbur Ross

It is expected that the United States will give formal notice to the Canadian government to renegotiate the North American Free Trade Agreement (NAFTA) within days of the inauguration of Donald J. Trump on January 20.

The Globe and Mail reports, “Canadian officials say the nominee for commerce secretary [billionaire investor Wilbur Ross] has indicated a formal-notification letter to open negotiations on NAFTA will be sent to Canada and Mexico within days of Friday’s presidential inauguration.”

The article highlights, “[Ross] has informed Canada that rules of origin and independent dispute tribunals will be central to talks aimed at resetting the North American free-trade agreement. Remarkably the investor-state dispute panels are reportedly “on Mr. Ross’s radar” given “the United States has long complained these independent panels are unaccountable and give too much power to Mexico and Canada”.

Council of Canadians chairperson Maude Barlow has written, “The investor-state provision grants investors of the continent the right to sue one another’s governments without first pursuing legal action through the country’s legal system. As a result of NAFTA’s ISDS challenges, Canada is now the most sued developed country in the world. Canada has been sued more times than either the U.S. or Mexico. Of the 80 known NAFTA investor-state claims, 37 have been against Canada, 22 have targeted Mexico and 21 have targeted the U.S. The U.S. government has won 11 of its cases and never lost a NAFTA investor-state case or paid any compensation to Canadian or Mexican companies.”

Despite this, the Trudeau government has defended the provision stating, “NAFTA Chapter 11 establishes a framework that provides investors with a predictable, rules-based investment climate. While disputes are a normal part of every trade relationship, they represent a very small portion of the billions of dollars in investment that Canada attracts and the billions that Canadian companies invest abroad.”

In terms of country of origin rules, The Globe and Mail notes, “[The rules] govern how much content from outside NAFTA a product can contain and still qualify to be shipped duty-free, are specific to each product and spelled out in writing. They cover every kind of good and service, from suits to cars. The Trump administration is expected to take a harder line on exactly what can cross the border duty-free.”

In November 2016, The Globe and Mail reported, “[A transition team] memo says on the first day he takes office – Jan. 20, 2017 – he would order the Commerce Department and International Trade Commission to study the ramifications of withdrawing from NAFTA and what would be required legislatively to do so. The memo also says Mr. Trump would then have the U.S. trade representative, his cabinet appointee in this area, notify Canada and Mexico that the United States intends to propose amendments to the accord that could include lumber and country-of-origin labelling. Other areas might include currency manipulation as well as environmental and safety standards.”

For an explanation of those specific areas that could be up for negotiation, please read this campaign blog.

With the NAFTA negotiations imminent, the Council of Canadians is calling for:

1- transparency through the entirety of the negotiations – especially in regards to what Trudeau is conceding to Trump to maintain NAFTA

2- meaningful consultations with the general public, as well as consultations and consent from First Nations

3- removal of the controversial Chapter 11 investor-state provision

4- removal of all references to water in NAFTA as a good, service or investment, unless to allow for the specific protection or exclusion of water

5- an exemption from NAFTA’s energy proportionality rule in order to meet our Paris climate commitments

6- a North American Auto Pact to ensure that each country receives a proportional share of employment and investment, and that workers have good jobs and fair wages

7- strengthening the exemption of medicare in NAFTA to allow for an expansion of public health care in areas including pharmacare.

For our campaign web-page on NAFTA, please click here.