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Speculation intensifies that a NAFTA 2.0 deal may (or may not) be reached in the coming weeks

The Canadian Press reports there may be reason to believe a renegotiated North American Free Trade Agreement (NAFTA) could be reached in the coming weeks. The 1st round of NAFTA talks took place August 16-20, 2017.

The article notes, “At the conclusion of the [7th] round of negotiations in Mexico earlier this month, U.S. Trade Representative said ‘time is running very short’ to get a deal before ‘political headwinds’ — Mexico’s presidential election in July, American midterms in November and provincial elections in Ontario and Quebec — start to complicate matters. For the first time, Lighthizer made public his hope of completing a NAFTA deal — including the legally required six-month congressional consultation period and ratification vote – before a new Congress gets sworn in next January.”

That would suggest a deadline of June 30 at the latest.

The news report highlights that the U.S. demand on automobiles has been that vehicles must have 50 per cent American content and 85 per cent North American content and to be eligible for duty-free movement across the three countries. There is some conjecture in the article by Flavio Volpe, president of the Automotive Parts Manufacturers Association, that the United States might now be more open to accept the Trudeau government’s offer that would include a calculation on intellectual property which would serve to boost American content in the calculation on cars.

In terms of other areas:

1- “The U.S. has also demanded an end to Canada’s supply management system, which limits imports on milk, cheese and poultry, and sets minimum prices. Some trade experts suspect the Trudeau government may be willing to accept a small increase in U.S. dairy imports, similar to what was agreed to in the original Trans-Pacific Partnership, before Trump withdrew the U.S. from that trade deal.”

2- “The U.S. has proposed a number of so-called poison pills that Canada and Mexico have flatly rejected, including: elimination of NAFTA’s dispute resolution mechanisms; a sunset clause that would automatically terminate NAFTA unless it was renewed by all three countries every five years; and Buy American provisions to limit the number of American public contracts that could be awarded to Canadian and Mexican companies.”

3- There have been news reports that the energy proportionality provision in a NAFTA 2.0 would be extended to include Mexico. There is no indication of any talks to remove water as a service, good and investment remains in the deal.

While there is some speculation that a deal might be reached, Unifor president Jerry Dias says, “My guess is this thing isn’t going anywhere.”

The next round of talks is expected to take place April 8-18 in Washington, DC.

To sign our petition calling on Trudeau to remove the controversial Chapter 11 investor-state dispute settlement provision from the deal, please click here.