NAFTA Renegotiations

PHOTO: TheMexicanGentleman, via Wikimedia Commons

Renegotiations of the North American Free Trade Agreement began in August 2017, three months after U.S. President Donald Trump signaled his intention to renegotiate the deal, stating that it’s obsolete and unfair to American workers.

The U.S. published its wish list in July 2017, a 16-page document, for the NAFTA negotiations, and it is rather ambitious.

Trump wants more exports for U.S. dairy products, wines and grains; freer trade in telecommunications and online purchases; new rules on currency manipulation; more access for U.S. banks abroad and the elimination of independent dispute resolution panels—enshrined in Chapter 19 of the treaty—which have ruled in Canada’s favour on past softwood lumber disputes.

One trade expert called these demands a “mercantilist dream”, maintaining the protection of certain heavily subsidized U.S. industries, like dairy, sugar and other agri-foods, while demanding open access to Canadian industries.

The U.S. is also insisting on preserving Buy American rules that limit government procurement opportunities of foreign countries within the U.S., while creating more opportunities for Americans in procurement contests abroad.

A primer on the major sticking points, such as the dispute settlement mechanism, dairy, wine, investment and online shopping, can be found here.

Intellectual property is on the table as well—learn more here.

As far as our side is concerned, David MacNaughton, Canada’s ambassador to the U.S., said before negotiations began in July 2017 that he’s committed to resolving these talks as quickly as possible but won’t risk a bad deal for Canada to do so.

“Obviously if we could get a clarification of the trading relationship sooner rather than later it would be better, but having said that we’re not going to rush into a bad deal. We’re ready to sit down and work on this negotiation for as long as it takes to get something that is going to be good for Canadians,” he said.

Ailish Campbell, Canada’s Chief Trade Commissioner, laid out the government’s position in a recent interview with ExportEdge:

If the renegotations come up with nothing and the White House does decide to pull out of the agreement, which President Trump has threatened to do many times, here’s what that dreaded worst case scenario might look like:

The NAFTA nightmare scenario

A seven-step guide to what will and won’t happen if Trump follows through on his persistent threats and tries to unilaterally pull the U.S. out of the trade deal

The move would likely trigger a battle between Trump and pro-trade Republicans. PHOTO: Joyce N. Boghosian/The White House

In the meantime, as an exporter all you can do is stay abreast of information. ExportEdge and has been covering Trump, NAFTA renegotiations and other pivotal trade issues associated with the U.S. extensively, and will continue to do so.

Beyond staying connected, reaching out to a lawyer or investment professional on how best to proceed with business plans may be pertinent.

ExportEdge will be updated as we learn more.

Source: The Canadian Press