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US Commerce Secretary Wilbur Ross says new chapters could be added to NAFTA

US Commerce Secretary Wilbur Ross

The Council of Canadians has been mobilizing people across the country to send a message to Prime Minister Justin Trudeau about the upcoming renegotiation of the North American Free Trade Agreement (NAFTA).

More than 10,000 people have responded to our online action alert and have sent this message to the prime minister and opposition parties.

Now Wilbur Ross, a billionaire banker named by US President Donald Trump to be his Commerce Secretary, says that several entire new chapters could be added to the trinational agreement.

In terms of the US agenda for the talks, Ross says, “It’s an old treaty. Our economy is very different from what it was when … that treaty was entered into. There were some things in [the original] that were missed. There were things in it that were not done correctly to begin with. And a lot of things that might have been OK back then but don’t work now. So there’s a lot to fix … Several chapters need to be added because of the digital economy and other things that have developed subsequently.”

In January, The Globe and Mail reported, “[Ross] has informed Canada that rules of origin and independent dispute tribunals will be central to talks aimed at resetting NAFTA.” The investor-state dispute panels are “on Mr. Ross’s radar” given he believes “these independent panels are unaccountable and give too much power to Mexico and Canada”. This despite the fact that the United States has never lost a NAFTA investor-state case or paid any compensation to Canadian or Mexican companies, while Canada has paid $170 million and Mexico $204 million in lost or settled claims.

The Canadian Press also reports, “Ross has made no secret of his desire to adjust rules of origin for tariff-free vehicles, to bring the production of auto parts closer to home. What’s unclear is whether those changes would be aimed simply at reducing imports of parts from Asia, or from the North American neighbours.”

In terms of when the talks would begin, Ross says, “You’re talking probably the latter part of this year before real negotiations get underway. [Then] I think the negotiations hopefully won’t take more than a year.” That’s later than the speculation of June 15 as the start date for the formal talks.

Ross also praises Trump’s bellicose approach on trade. He says, “He’s made my job easier by softening up the adverse parties. What could be better than going into a trade negotiation where the fellow on the other side knows he has to make concessions? …The Mexicans know, the Canadians know, everybody knows, times are different. …And 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.”

The Trudeau government has been even less forthcoming in making public its negotiating position. Earlier this week, David MacNaughton, the Canadian ambassador to the US, said he wants dispute resolution procedures to “move along quicker” and that he was interested in adding (unspecified) improvements that had been included in the Trans-Pacific Partnership (TPP).

And in November 2016, the Canadian Press reported, “Canada has been hoping for years to modernize NAFTA’s visa rules — considered out-of-date and cumbersome by companies that operate in both countries. NAFTA allows easy access to visas for a list of professions, but that list is more than two decades old and barely references jobs related to the digital economy.”

Other than those snippets, MacNaughton says he has “a good sense of what would be in Canada’s interest” and that he wants to avoid negotiating in public, but we believe transparency and accountability are needed.

To tell Prime Minister Trudeau that the renegotiation cannot be another backroom deal, please click here.