Skip to content

What can we expect with the start of NAFTA talks this week?

What might Trudeau and Trump announce at the conclusion of the NAFTA renegotiation? Photo by Sean Kilpatrick.

The formal renegotiation of the North American Free Trade Agreement (NAFTA) will begin this coming Wednesday. Two weeks ago, The Canadian Press reported, “The opening round will be held Aug. 16-20 in Washington, Mexico will host the second a few weeks later, then Canada will host the third. In the initial session, officials will prioritize the easiest issues: settling on a meeting agenda, on the number of negotiating groups, and on how to compile an agreement text. …The most difficult issues will start emerging [around October]: dairy, auto assembly and pharmaceuticals are among those anticipated late-stage sticking points.”

On July 17, the United States Trade Representative outlined the Trump administration’s negotiating objectives within the deal. In Canada, it has been more of a process of trying to discern from the statements of officials and newspaper articles the negotiating objectives of the Trudeau government. This morning, the CBC reports, “Before the formal kickoff in Washington, [Foreign Affairs Minister Chrystia] Freeland will deliver a speech at the University of Ottawa on Monday morning, where she will outline in broad strokes Canada’s objectives for a renewed NAFTA. She will then move to the hot seat on Parliament Hill, where she will take questions from the Commons committee on foreign affairs and international development later Monday morning.”

The CBC also notes:

1- “[Trudeau wants to see in the NAFTA rewrite] stronger environmental and labour provisions and a formal mechanism to settle thorny trade disputes.”

2- “[Trudeau could resist Trump’s] proposed changes to government procurement, rules of origin and a goal of eliminating the U.S. trade deficit.”

3- “Freeland called [the Chapter 19 state-to-state] dispute settlement resolution ‘essential’ to any trade agreement.”

4- “[Trudeau may be open to] possible adjustments on tariff exemptions for online shopping and some liberalization of supply managed poultry and dairy that would allow more U.S. imports into Canada.”

For greater context on the first point listed above, The Globe and Mail reported (on July 23) that, “Ottawa remains committed to investor-state dispute settlement [meaning Chapter 11], [but Freeland] has indicated she wants to update the accord in order to increase the legal rigour of the arbitration process and to assert governments’ right to regulate in the public interest, such as on environment and labour. Such changes – along with a new appeal process – were incorporated into the Comprehensive Economic and Trade Agreement (CETA) that Ottawa concluded recently with the European Union.”

And on August 8, the Canadian Press reported, “Prime Minister Justin Trudeau said last week Canada wants climate change, reduced emissions and efforts to shift to a low-carbon economy written into the new NAFTA [which Trump is likely to oppose]. …[But] one area where both Canada and the United States agree is in bringing the environment chapter into the main NAFTA papers. In 1994 it was included as a separate annex. Including it as its own chapter in NAFTA would make whatever environmental obligations it puts forward subject to the agreement’s dispute resolution provisions.”

The Globe and Mail editorial board – likely reflecting the consensus view of Canada’s business and political elite – says:

1- “An independent dispute settlement mechanism [meaning the Chapter 19 state-to-state provision] is Issue No. 1 for Canada.”

2- “[Trudeau should resist] moves to benefit American pharmaceutical companies in ways that extend patent protections and push up drug costs.”

3- “[Trudeau should also resist] a U.S. desire to give American online retailers a leg up compared to Canadian retailers, by exempting significant amounts of foreign online purchases from duties and sales taxes.”

4- “[And Trudeau should oppose] the U.S. goal of creating a giant ‘Buy America’ exception inside NAFTA.”

5- “Canada may not want to try to bring softwood into the talks. Trying to fix that endless dispute through NAFTA might reduce Canadian negotiating leverage elsewhere.”

6- “And as for agricultural supply management, if the Americans push the issue, Ottawa should be happy to lower the trade barriers – and the high prices paid by Canadian consumers for dairy and other foods.”

The Council of Canadians rejects the lack of transparency and the Trudeau government not making public its negotiating objectives. This is another broken election promise given Trudeau had stated in October 2015, “The Harper Conservatives have failed to be transparent through the entirety of the [Trans-Pacific Partnership] negotiations – especially in regards to what Canada is conceding in order to be accepted into this partnership. The government has an obligation to be open and honest about the negotiation process, and immediately share all the details of any agreement.”

We have also called for the removal of the Chapter 11 investor-state dispute settlement provision (and have rejected the so-called reform of the investment court system provision found in CETA), want references in NAFTA to water as a tradable good, service and investment to be deleted, and oppose the energy proportionality provision (the de facto mandatory oil and gas export provision) and are especially concerned that the renegotiation of NAFTA could mean that Mexico might be subject to the disciplines of this provision (further hastening the climate crisis).

To read our ten demands for the renegotiation of NAFTA (first articulated in February 2017), please click here. Our fact sheets, handimation videos, actions alerts, blogs and other resources can be found here. And be sure to watch our ad on NAFTA and Chapter 11 that will be aired on Monday August 14 at 10:10 pm during The National on CBC Television!

We will continue to monitor and mobilize in defence of the public interest throughout the NAFTA negotiation process – whether those talks conclude as early as April 2018 (as has been suggested) or extend to October 2019 or later (as is perhaps more likely given the ratification process).