The difficulty going forward in further rounds of NAFTA negotiations was illustrated in the difficulty agreeing to the communique ending the first round on Sunday, August 20, 2017 in Washington.
American negotiators wanted the communique to refer to the four days of talks as the first round in the “renegotiation of NAFTA.”
But negotiators for Canada and Mexico balked at that wording. They wanted the talks described as discussions towards “the modernization of NAFTA.”
Shakespeare once asked: “What’s in a word?”
Well in this case, plenty. The words the Americans wanted describing the talks underline the approach the United States is so far taking in the negotiations. They want a major rewrite of the agreement that President Donald Trump has characterized as “the worst trade deal ever.”
Canada and Mexico don’t agree. Both countries want to preserve as much as possible of the twenty-three year old agreement, and then modernizing it by adding new chapters to cover e-commerce and other aspects of today’s economy that didn’t exist when NAFTA went into effect in 1994.
The dispute over the communique words was matched by action. During the first negotiating session the Americans took an aggressive approach.
Consider just a couple of their demands.
They proposed that cars made under NAFTA, one of the real success stories of the agreement, have even more of their content manufactured in North America that the 62.5 per cent required for duty free treatment under the treaty now.
And that’s not all. U.S. negotiators also want a specific amount of that content actually produced in the United States, rather than in any of the three countries as required now.
The Americans also want to do away with the independent dispute settlement mechanism currently in NAFTA, and have the U.S. Courts rather than panels with experts from each of the countries deciding trade disputes. Canada has already said that could be the “deal breaker,” but the Americans proposed it anyway.
Those and many more issues will have to be negotiated, compromises made and agreements reached in the rounds of negotiating sessions going forward.
Can that be done?
Well there’s one hopeful sign.
In Washington all three countries finally agreed on words to describe what they were working on. They agreed the first round of talks had concluded on “the renegotiation of the modernization of NAFTA.”
Perhaps there is hope after all.
Ensight Senior Counsel Don Newman has extensively covered trade issues, politics and elections in Washington. He is a member of the Order of Canada and a life-member and past president of the Canadian Parliamentary Press Gallery.