Newman on NAFTA: Why Canada Won’t Walk Away from the Negotiating Table

Newman on NAFTA: Why Canada Won’t Walk Away from the Negotiating Table

Don Newman

Ensight’s Don Newman on NAFTA talks resuming in Mexico City this weekend, why the Ministers won’t be there and when the next make or break period is (Hint – January).

NAFTA negotiations are resuming this weekend in Mexico City.

This time the negotiators from Canada, the United States, and Mexico will be on their own. Canada’s Foreign Affairs Minister, Chrystia Freeland, and her counterparts from the United States and Mexican cabinets won’t be there. Not enough progress is expected to be made that their attendance will be required.

Not only that, the cabinet ministers won’t be attending the next negotiating session either. Breaking with the usual sequences of rotating the meetings between the three countries’ capitals, only the negotiating teams will meet again next month in Washington, although it should be Canada’s turn to host the next meeting in Ottawa.

However, Ottawa will be the site of a meeting in January, where the Ministers as well as the ‎negotiators will be present. That meeting could be make or break for NAFTA. Either a new deal will be taking shape or the differences will be too wide to bridge.

Between now and then, the Canadian Government and, by extension, all Canadians will have some hard thinking to do.

We have already decided to stay at the negotiating table as long as the Americans are there. Even though at least three deal breakers were put on the table by the U.S., we are not going to give President Donald Trump ‎an easy out and walk away from the talks.

Instead, if he gives notice that he wants to terminate NAFTA, and provides the U.S. Congress with the six months’ notice required, we and the Mexicans will still be at the table. The termination notice may well be a negotiating ploy, but it will also trigger a constitutional argument in Washington over whether Trump has the unilateral authority to end the deal.

As with everything Trump does, that will be full of controversy and ‎clamour in Washington. In Ottawa, more serious thinking has likely already started and will be continuing.

What is increasingly clear is that the North American Free Trade Agreement that emerges from these negotiating sessions is not going to be a new and improved version of the one in effect for almost a quarter century.

The Trump administration is only going to sign a new agreement that tilts the trade playing field to the Americans’ advantage. The only real question is how much.

In 1987 when negotiations on the Canada-U.S. Free Trade deal came down to the deadline, then Prime Minister Brian Mulroney could have threatened to walk away without an agreement. If he had, and NAFTA had not happened, the status quo would have been preserved, nothing would have changed. In effect, no one would have noticed.

But that is not the case now. For the past twenty-five years the Canadian economy has been shaped around NAFTA.

If NAFTA were to go away, one of the underpinnings of our economy would go with it. This time the status quo would disappear. The impact would be profound. 

That is why the Government is going to have to see what kind of a free trade agreement is left when the negotiations are over. It may well be that some of NAFTA is better than no NAFTA at all. Or it may not be.

And that is why the next two and a half months are so important.

Don Newman is Senior Counsel at Ensight, a Member of the Order of Canada, and a life-member and past president of the Canadian Parliamentary Press Gallery.