Newman on NAFTA: Canada’s Full Court Press in Washington and Why it May Not Be Enough

Newman on NAFTA: Canada’s Full Court Press in Washington and Why it May Not Be Enough

Don Newman

Ensight’s Don Newman on how high the stakes are for Prime Minister Trudeau during the fourth round of NAFTA talks in Washington and why President Trump may just walk away

Prime Minister Justin Trudeau is visiting Washington this week to meet with President Donald Trump and important members of the U.S. Congress.

Why this week? Well this is the week the negotiations for a renewed North American Free Trade Agreement could collapse. And Trudeau wants to be seen as doing everything possible to try and prevent that.

The fourth round of talks to revise the 25 year old agreement begin Wednesday in Washington. ‎This is the round where the Americans are expected to put their most contentious issues on the table.

These issues include:

Buy American / Hire American

The controversial demand that United States‎ companies have the right to bid on Canadian Government contracts, but government contracts in the United States are reserved for only local companies, under the Trump administration’s “Buy American. Hire American” plan.

Car Manufacturing

The demand that all cars manufactured in the three NAFTA countries have a minimum of fifty per cent of their content originate in the United States. Present NAFTA content rules require that sixty-two point five per cent of a car must come from any of Canada, the U.S. or Mexico to pass duty free among the three countries. Raising the content rules as proposed by the Americans would mean that NAFTA countries content would be over eighty per cent, with the overwhelming amount of that content American.

Dispute Settlement

And the proposals for a changed dispute settlement arrangement. The Americans say the present method of settling disputes by independent panels whose members are drawn from all three countries is unfair to the U.S. They want U.S. Trade law, courts and tribunals to adjudicate disputes.

Both Canada and Mexico have said this proposal is a deal breaker that will kill NAFTA. And seeing the way U.S. Trade tribunals are hammering Canada in the Bombardier – Boeing dispute and on Canadian Softwood lumber exports, the resolve to say an emphatic “NO” to putting those same arrangements in NAFTA will only be strengthened. But saying “no” to these proposal will give President Trump the opening he is looking for.

During the election campaign last year Trump said he would either reform NAFTA or kill it. Many people have thought killing it is his real objective. Rejection by Canada or Mexico of the one-sided U.S. proposals put forward this week‎ would give him that opportunity. This week’s visit by Prime Minister Justin Trudeau is a last ditch effort to prevent that from happening. It is unlikely to be enough.

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.