One year ago, trade representatives from Mexico, Canada, and the United States kicked off renegotiations for the North American Free Trade Agreement Washington, D.C., with a goal of clinching an agreement by early 2018.
While some progress has been made, a deal still hasn’t been reached. Autos and the U.S. demand for a sunset clause have been key sticking points. Meanwhile, Canada has become one of Donald Trump’s main targets in recent weeks with the U.S. president threatening more tariffs on Canadian car imports if a deal isn’t struck.
Below, four experts weigh in on Canada’s progress in the talks so far and offer their view on what needs to happen next.
COLIN ROBERTSON, VP AND FELLOW, CANADIAN GLOBAL AFFAIRS INSTITUTE
Grade: A, for exhibiting Hemingway’s definition of courage: “grace under pressure”
What has been the biggest hurdle for Canada so far?
“Donald Trump. Does he want a NAFTA or not? Is the administration prepared to negotiate on the remaining critical issues: dispute settlement (chapters 11, 19, 20) and government procurement?”
What has been Canada’s biggest success?
“We are still in negotiation and the Canada-Mexico partnership remains solid.”
What has been the biggest disappointment?
“U.S. intransigence and the sense that their negotiating team is awaiting instructions on their mandate and scope for negotiation.”
What is the most important thing Canada needs to do going forward?
“Keep negotiating and trying to make progress on the issues. Keep in mind the average negotiation for a deal of this size even renegotiated is three-to-five years. We are actually making reasonable progress given the complexities involved. Granted, a lot of what is being negotiated was already negotiated by the U.S., Canada and Mexico in the TPP and many of the negotiators are the same. So there is familiarity with the issues and one another.”
What has been the biggest surprise throughout the negotiations?
“Donald Trump’s personal involvement. He has so much policy ground to choose from but he has made NAFTA a personal interest as we have learned to our surprise and disappointment in his tweets.”
MARYSCOTT GREENWOOD, CEO, CANADIAN AMERICAN BUSINESS COUNCIL
Grade: I for incomplete
What has been the biggest hurdle for Canada so far?
“I would say the unpredictability of the U.S.”
What has been Canada’s biggest success?
“Raising awareness in the U.S. and Canada of the importance of our economic relationship.”
What has been the biggest disappointment?
“Not getting a deal done yet.”
What is the most important thing Canada needs to do going forward?
“Canada needs to come to the table with practical deals in mind. Focus on the practicality as opposed to the principle.”
What has been the biggest surprise throughout the negotiations?
“The fact that [Andres Manuel Lopez Obrador], the new president of Mexico, has been eager to conclude a modernized NAFTA before he takes office on Dec. 1.”
CHRISTOPHER SANDS, DIRECTOR, CENTER FOR CANADIAN STUDIES, JOHN HOPKINS UNIVERSITY
Grade: C
What has been the biggest hurdle for Canada so far?
“Overcoming an initial impression (given by President Trump) that the renegotiation of NAFTA would involve only ‘tweaks’ with regard to Canada-U.S. trade arrangements. This led Canada to play it safe with a defensive strategy that was hard to abandon when the gravity of the talks became more apparent (lots of clues are visible in retrospect).”
What has been Canada’s biggest success?
“Mobilizing an impressive outreach to the Congress, state governors and legislators on the benefits to the United States of trade with Canada … Combined with a thoughtful outreach to the Trump administration, including White House staff and cabinet departments, the Canadian effort was more extensive that any that a foreign country has ever mounted in the United States.”
What has been the biggest disappointment?
“It would be a tie for me. First, the failure of the impressive Canadian outreach to garner a single concession from the United States – not on softwood lumber, not on gypsum – which was then followed by the self-destructive Canadian attack on U.S. trade remedy practices now pending before the World Trade Organization, a clear sign of Canadian frustration.
“Second, the business community in both Canada and the United States has been far less effective at defending the integrated continental supply chains that link the three NAFTA economies. Why? I still don’t really know.”
What is the most important thing Canada needs to do going forward?
“Heal the breach with the Trump White House.”
What has been the biggest surprise throughout the negotiations?
“Almost all of the things I have mentioned above surprised me, but the suspension of the NAFTA talks in June followed by their resumption on a bilateral basis by the U.S. and Mexico was the biggest surprise.”
MARK WARNER, PRINCIPAL, MAAW LAW
Grade: A+ for effort in engaging with key stakeholders, B+ overall
What has been the biggest hurdle for Canada so far?
“The biggest hurdle for Canada in the NAFTA negotiations so far has been in grappling with the scope of the Trump administration’s demands to roll back some of the perceived gains from NAFTA in the area of dispute settlement (and demand for a sunset clause) and to deal with traditional U.S. demands for concessions in areas like supply management for the price of maintaining NAFTA rather than for new U.S. concessions.”
What has been Canada’s biggest success?
“The biggest success for Canada has been to keep drawing out the negotiations without Trump triggering a notice of withdrawal to Canada and Mexico. That said, the price of doing so has been increased investment uncertainty and the strategy has led Trump to seek other opportunities for leverage in the negotiations outside NAFTA, most notably in Canada’s inclusion in the Section 232 national security tariffs on steel and aluminum and threatened ones on autos.”
What has been the biggest disappointment?
“The biggest disappointment is that Canada has adopted a passive, defensive approach to the NAFTA renegotiation with engagement mostly with U.S. stakeholders rather than proactively engaging stakeholders in Canada for self-interested policy or market access concessions that could be offered up to move Canada out of Trump’s attention (e.g. supply management).”
What is the most important thing Canada needs to do going forward?
“The most important thing Canada needs to do right now is to find something to offer in the NAFTA negotiations to avoid Trump imposing Section 232 national security tariffs on exports of autos and auto parts from Canada. And to end the spiral of ‘tit for tat’ tariff retaliation, which is a game that ultimately Canada cannot win because of the asymmetries in the size of the two economies and relative importance of bilateral trade to each country.”
What has been the biggest surprise throughout the negotiations?
“The biggest surprise to me is that Canada and Mexico have managed to hang together, at least publicly, until recently, although I wonder whether the time horizons of the newly-elected Mexican president and the Canadian prime minister approaching his re-election year will stay aligned if the NAFTA negotiations continue.”