NAFTA could be dead if no major progress in early 2018, warns former Canadian trade negotiator

Source: Xinhua| 2017-11-25 07:01:37|Editor: Zhou Xin

OTTAWA, Nov. 24 (Xinhua) — The future of the North American Free Trade Agreement (NAFTA) could be determined early next year when negotiators from the United States, Canada and Mexico meet in late January for a sixth round of talks to rework the tripartite trade deal, a Canadian official involved in drafting NAFTA has said.

Retired Canadian diplomat Colin Robertson, who also helped negotiate the pre-NAFTA Canada-U.S. Free Trade Agreement (FTA) in the late 1980s, believes that if no significant progress is made on the most contentious issues early next year in the Canadian city of Montreal, NAFTA could be dead and its predecessor FTA could come back into force.

The fifth round of negotiations, which have concluded in Mexico City, produced no movement on such key areas of dispute as rules of origin in the automobile manufacturing industry, and raised the question of whether “the Americans are serious or are looking for an excuse to exit,” Robertson told Xinhua in an interview.

Following the end of the Mexico talks this week, U.S. Trade Representative Robert Lighthizer said in a statement that American negotiators “have seen no evidence that Canada or Mexico are willing to seriously engage on provisions that will lead to a rebalanced agreement” and that “absent rebalancing, we will not reach a satisfactory result.”

Canadian Foreign Affairs Minister Chrystia Freeland told reporters here that Canada “simply cannot agree to” some “extreme proposals” from the the United States.

“Our approach is to hope for the best and prepare for the worst and Canada certainly is prepared for every eventuality,” she said.

Mexico, Canada and the United States have been renegotiating NAFTA since August, at the request of U.S. President Donald Trump, who has alleged that the 23-year-old agreement has harmed his country and has threatened to withdraw from it.

The Trump administration wants to raise the minimum threshold for autos to 85 percent North American content from 62.5 percent as well as to require half of vehicle content to be from the United States.

Canada and Mexico as well as all North American carmakers and autoworkers unions oppose both proposals.

The Americans also want to eliminate the dispute-resolution mechanism under NAFTA, which has implications for Canada regarding its ongoing cross-border conflict with Washington over Canadian softwood lumber exports to the U.S. and the Boeing-Bombardier feud that affects both countries’ aerospace sectors.

In addition, the United States seeks to have a five-year sunset clause included in NAFTA in which the trade pact could terminate if all three countries fail to renew the revised agreement after five years.

Robertson said that such a clause could discourage investment from companies that typically seek a 15-to-25-year timeframe to realize some returns.

Canada’s participation in the Trans-Pacific Partnership, its trade agreement with the European Union (EU) and Prime Minister Justin Trudeau’s upcoming trip to China to advance exploratory talks for a trade deal could “send a signal to the U.S. that Canada has other options” for trade agreements, said Robertson.

Should NAFTA fall apart and the Trump White House rejects the Canada-U.S. FTA, both countries would revert to most favored nation status.

Robertson said that under that basic trade arrangement, “tariffs would be applied to most things Canada sells to the U.S.” and vice versa, and it could mean that it would be cheaper for Canada to buy tariff-free goods from Europe through the free trade agreement Canada has with the EU.

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Lobbying to Save NAFTA Proving Effective

18 May 2017

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CANADA – The Vice President of the Canadian Global Affairs Institute says lobbying efforts from both within the United States and from Canada and Mexico to salvage the North American Free Trade Agreement are showing results, Bruce Cochrane writes.

Since the election of US President Donald Trump the future of the North American Free Trade Agreement has been in question.

Colin Robertson, the Vice President and a Fellow with the Canadian Global Affairs Institute, observes trade is important to the United States, especially to US agriculture.

Colin Robertson-Canadian Global Affairs Institute

There was a faction within the White House, probably led by Mr Bannon and involving Peter Navarro who now heads his Trade and Industry Office in the White House, was encouraging the President to rescind the North American Free Trade Agreement but there was pushback from within the White House.

As within any administration there are various factions, led by probably Mr Cohn and Jared Kushner his son in law.

When word got out that this plan was to rescind the NAFTA, it was leaked up on Capitol Hill where the reaction was quite negative on both sides of the aisle.

Both Democrats and Republicans, Republicans like John McCain who chairs the important Armed Services Committee and most importantly within the farm community in what we would call Trump states, those states in the Midwest that voted for Mr Trump.

Ohio, Iowa Wisconsin, they pushed back and said no, don’t rescind the NAFTA because it’s working for us.

The agriculture community has responded to word that the NAFTA might be ending and this will play out.

This is not something that will be settled today.

This is like a moving picture.

We’re never sure on any day where things is going.

The Canadian and Mexican efforts to point out that trade works well not just for Mexico and Canada but for the United States, I think, is starting to show some result.

Mr Robertson remains optimistic.

He notes Canadian efforts to remind the Americans of how much trade with Canada matters to the United States have had an impact.

ThePigSite News Desk

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