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Is Trudeau preparing to make NAFTA concessions as Trump suggests extending talks past July?

It can be difficult to discern what’s happening with the North American Free Trade Agreement talks in advance of the 6th round of negotiations in Montreal this coming January 23-28, but this is what we can piece together:

As we noted in this blog last week, the ‘poison pill’ demands being made by the Trump administration are still on the table.

But on Thursday (January 11), The Globe and Mail reported, “Canada is working on a proposal to boost the amount of North American-made content in cars and trucks manufactured in the NAFTA zone, sources say, in a bid to break the deadlock over one of the most contentious subjects in the trade deal’s renegotiation. Ottawa is also crafting a series of potential compromises on the North American free-trade agreement’s dispute-resolution provisions [Chapters 11, 19 and 20], another major sticking point in the talks between Canada, the United States and Mexico.”

Following that, on Sunday (January 14), Toronto Star columnist Thomas Walkom commented, “Canada seems to be quietly backing down on NAFTA. It is now willing to bargain U.S. demands that the Liberal government had formerly dismissed as deal-breakers. …How much Canada is willing to compromise on its so-called red line demands in order to accommodate U.S. President Donald Trump remains unclear.”

On Wednesday January 10, the World Trade Organization made public a wide-ranging complaint made by Ottawa (in December) against Washington’s use of anti-dumping and anti-subsidy duties.

While this has been characterized as ‘Ottawa launching an all-out trade war against Washington’, Walkom cautions, “Perversely, one indication that the Liberal government may be preparing to cave on NAFTA is its decision to take a harder rhetorical line against the U.S. in the separate softwood lumber dispute. …Sometimes governments talk tough when they are tough. But sometimes they do it to distract attention when they are preparing to cede ground.”

Furthermore, the same day that The Globe and Mail reported Ottawa was “crafting a series of potential compromises” on NAFTA, Trump suggested to the Wall Street Journal that NAFTA talks could be extended past the current mid-March deadline and continue after the July 1 presidential election in Mexico.

That suggestion was quickly welcomed by Foreign Affairs Minister Chrystia Freeland.

Also this weekend (Sunday January 14), CTV reported, “Canada’s International Trade Minister said there’s no clear ‘plan B’ if the trilateral deal gets torn up.” Given Trump’s longstanding and repeated statements that NAFTA is a terrible deal and that he is willing to rip it up, this is a shocking admission by the Government of Canada.

The Liberals and Conservatives also appear to be closing ranks on NAFTA. Rather than being critical of the Liberals and scoring political points, Conservative foreign affairs critic Erin O’Toole now says, “We want the government to succeed. NAFTA is a legacy Conservative achievement. We’re free traders. This is beyond partisanship.”

Meanwhile, Unifor president Jerry Dias recently stated, “NAFTA is in the toilet. The only way it’s going to survive is if somebody completely capitulates. And that’s not going to happen in the short term.”

And this morning, The Tyee quotes Dias saying, “Working class Canadians absolutely will see [Trudeau] walking away [from NAFTA] as a sign of courage and will see it as a good move. Because working class people are the ones who have felt the pain as the result of terrible trade deals.”

The Council of Canadians and allies will be rallying in Montreal on Saturday January 27 at 12 noon, likely near the Hôtel Bonaventure (900 Rue de la Gauchetière O) where the NAFTA talks are taking place.