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What’s the state of play so far in the 6th round of NAFTA talks?

The Council of Canadians Montreal chapter and allies rallied on Saturday January 27 outside the Hôtel Bonaventure in Montreal, the venue for the 6th round of NAFTA talks. Photo by Mike Le Couteur, Global News.

US Trade Representative Robert Lighthizer is expected to arrive in Montreal tomorrow (Sunday January 28) and to comment on Monday (January 29) on the Trudeau government’s counter-proposals that have emerged during this 6th round of negotiations on the North American Free Trade Agreement.

Key areas that are reportedly being discussed this round include:

1- Auto parts: The Trump administration wants to increase the overall North American content requirements from 62.5 per cent to 85 per cent and US content to 50 per cent. The Trudeau government is proposing the percentage include software development and high-tech auto components in the calculation to inflate the US percentage.

2- Sunset clause: Trump wants a ‘sunset clause’ that would automatically terminate the agreement in five years if all three countries did not approve it at that time. Trudeau is proposing ‘periodic reviews’ without the threat of the deal being terminated.

3- Dispute resolution: Trump wants the right to ‘opt out’ of Chapter 11 (investor-state dispute resolution), Chapter 19 (on anti-dumping and countervailing duties) to be struck from the deal, and Chapter 20 (state-to-state adjudication) panels to be demoted to an advisory role. Trudeau is proposing that the US to ‘opt out’ of Chapter 11 (while Canada would ‘opt in’ to the provision), but is defending Chapters 19 and 20.

In terms of other US ‘poison pill’ demands still to be negotiated:

4- Agriculture: Trump wants to protect US seasonal produce growers from year-round Mexican imports and an end to Canada’s supply management system.

5- Procurement: Trump wants Canada and Mexico to be barred from receiving any more in government contracts, dollar-for-dollar, than American companies receive in Canada and Mexico.

6- Border wall: Trump has implied that he wants Mexico to pay for his proposed border wall between the United States and Mexico.

Other key areas include:

7- Indigenous rights: Trudeau has put forward an Indigenous rights chapter, but the document (that Global Affairs refused to allow the Council of Canadians to see following a formal Access to Information request) appears to be a largely symbolic gesture devoid of a commitment to the United Nations Declaration on the Rights of Indigenous Peoples and the right to free, prior and informed consent.

8- Energy proportionality: It would appear that both Canada and Mexico are proposing this provision (which says Canada and the US cannot reduce access to each other’s oil, natural gas, coal, electricity or refined petroleum products without an equivalent reduction in domestic access to the same product) be extended to cover Mexico (which did not sign on to this chapter in 1994).

The Canadian Press reports, “There are barely eight weeks left before the current schedule of talks expires, and Trump faces a decision soon about whether to extend the talks, pause during national elections in the US [on November 6] and Mexico [on July 1, with the new Mexican president sworn in on December 1] or start the [six-month] process of cancelling NAFTA.”

There are now media reports that there will be an informal round of talks in Mexico (starting February 26), that a 7th round would then take place in the United States (in late-March or April), and that a (previously unscheduled) 8th round might take place in Canada in May. Reuters adds, “Andres Manuel Lopez Obrador, the leftist front-runner in the presidential race, [says] the renegotiation should wait until after the election so that the next government he aims to lead would get a say in the treaty’s future.”