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Your guide to the NAFTA talks expected to start on August 16

Justin Trudeau, Donald Trump and Enrique Pena Nieto. Photo by Radio Canada.

U.S. President Donald Trump’s trade representative Robert Lighthizer has written a letter to Congress officially triggering the 90-day consultation period required to renegotiate the North American Free Trade Agreement (NAFTA). This is a significant development and raises a number of questions.

1 When will the talks begin and conclude?

The triggering of the 90-day period means that the talks could begin as soon as August 16. And though it would be a tight timeline, the speculation is that the talks would have to be concluded by April 1 of next year, just months prior to the July 1, 2018 general election in Mexico. That said, Reuters notes that Lighthizer said yesterday he hopes the talks will be concluded even earlier – by the end of 2017.

The CBC reports, “[Foreign minister Chrystia] Freeland said it was premature to speak about the timelines for the talks. But all three countries know that elections next year – first the presidential vote in Mexico, and then midterms for the U.S. Congress – could be disruptive if progress isn’t made before next spring.”

CNN adds, “The time line to get a deal done is narrow. Trade negotiations often take years. But Mexico has presidential elections in July 2018 and President Enrique Pena Nieto can’t run due to term limits. There’s no guarantee its next president will cooperate with Trump on NAFTA given his anti-Mexico rhetoric. US congressional mid-term elections in the fall of 2018 may also weigh on the Trump administration to make progress.”

2 – What will Trump demand in the upcoming talks?

The CBC notes, “The letter [to Congress] did not offer details about what the scope of these negotiations would include. Lighthizer writes about the need to update chapters that ‘do not reflect modern standards’ and mentions digital trade specifically as being only in its infancy when NAFTA was negotiated in the early 1990s. It [also] mentions the need for new provisions to ‘address intellectual property rights, regulatory practices, state-owned enterprises, services, customs procedures, sanitary and phytosanitary measures, labour, environment and small and medium enterprises’.”

The specific negotiating objectives are expected to be published around July 16.

That said, a draft letter from the acting U.S. Trade Representative was leaked this past March and could suggest what the Trump administration will be seeking. Among the 40 negotiating objectives listed in that letter were:

  • elimination of the Chapter 19 state-to-state dispute settlement provision

  • an end to non-tariff barriers in agriculture (supply management)

  • a border adjustment tax on foreign imports from Canada and Mexico

  • increased duties on imports unless they contain a higher level of U.S. content

  • a preferential ‘Buy American’ policy for government purchases

  • an ability to ‘safeguard’ against a flood of Canadian or Mexican imports

3 – What is Trudeau seeking in a renegotiated NAFTA?

We don’t know because there is not a similar requirement in Canada for the federal government to make public its negotiating objectives.

Yesterday, Freeland commented, “I’m not going to lay all my cards on the table now. I don’t think Canadians would like us to do that.” This is a direct contradiction of Justin Trudeau’s pledge in October 2015 when he commented on the Harper government’s handling of the Trans-Pacific Partnership negotiations.

At that time, Trudeau stated, “The Harper Conservatives have failed to be transparent through the entirety of the 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. Canadians deserve to know what impacts this agreement will have on different industries across our country.”

Freeland also says, “NAFTA’s track record is one of economic growth and middle-class job creation, both here in Canada and throughout North America.”

In Canada, imports destroyed more jobs than exports created – by 1997 the net destruction of jobs had reached 276,000. The loss of permanent, well-paid, and unionized jobs is not cause to boast of economic growth and middle-class job creation. In the name of competitiveness, unemployment insurance, health and education transfers, social assistance and housing programs were all ‘harmonized downward’ toward U.S. levels.

Furthermore, the Latin American news service Telesur reports, “According to the Center for Economic and Policy Research, Mexican poverty has risen since the deal’s implementation in 1994 as economic growth and real wages stagnated while nearly 5 million family farmers were displaced, propelling Mexico’s poor toward migration to the United States – crucial drivers of social instability and unrest.”

4- What is our position?

The Council of Canadians has argued that the government should make clear what it is seeking in these talks (we have put forward this list of demands) and articulate its red lines (what it will not concede). We also argue that the Trudeau government should make a public statement that it is prepared to walk away from NAFTA should Trump’s demands make the terms of an agreement untenable.

And we have highlighted that there should be public consultations as well as separate consultations with First Nations, given their rights under the United Nations Declaration on the Rights of Indigenous Peoples are impacted by NAFTA. Yesterday, Freeland claimed, “We will continue to consult closely with the provinces and territories, industry, unions, civil society, think tanks, academics, indigenous peoples, women, youth and the general public.” We have seen little evidence of meaningful consultation with the general public, civil society and Indigenous peoples and continue to press the government for real consultation and genuine transparency throughout the upcoming talks.

5 – What can you do?

You can tell Trudeau and Freeland through this online action alert that you want public consultations and Chapter 11, energy proportionality and water to be removed from NAFTA. You can also share new handimation videos on those three issues – investment, energy and water – that will be released in the coming weeks.

You can also meet with your Member of Parliament to tell them what you want to have changed in NAFTA and that you expect greater transparency through the entirety of trade negotiations (just as Trudeau promised just before he was elected). Please also keep visiting our website for updates and commentary as the talks get underway.