Nafta talks re­sume amid US-Canada air­craft dis­pute

The Phnom Penh Post - - BUSINESS - Del­phine Touitou

A FOURTH round of talks to re­vamp a land­mark North Amer­i­can trade pact was due to be­gin yes­ter­day amid in­flamed ten­sions be­tween Washington and Ottawa over a trade dis­pute in­volv­ing Bom­bardier air­craft.

Cana­dian Prime Min­is­ter Justin Trudeau was set to meet US Pres­i­dent Don­ald Trump at the White House yes­ter­day af­ter­noon, with ne­go­ti­a­tions on the North Amer­i­can Free Trade Agree­ment un­der­way nearby in the Washington sub­urb of Ar­ling­ton, Vir­ginia.

Trudeau’s visit comes as US of­fi­cials are seek­ing to im­pose re­tal­ia­tory im­port du­ties on im­ports of cer­tain Bom­bardier air­craft, claim­ing the Cana­dian gov­ern­ment has un­fairly sub­sidised them.

Ottawa in turn has threat­ened to can­cel a multi­bil­lion-dol­lar or­der of 18 Boe­ing F/A-18 Su­per Hor­net fighter jets.

The United States takes in three­quar­ters of Cana­dian ex­ports. But trade re­la­tions have been strained since Trump’s in­au­gu­ra­tion ear­lier this year.

The Amer­i­can pres­i­dent has re­peat­edly threat­ened to scrap Nafta, which es­tab­lished a free-trade zone be­tween the Canada, the United States and Mex­ico in 1994.

With a na­tion­al­ist eco­nomic agenda, Trump has de­nounced the agree­ment as a job de­stroyer and a “dis­as­ter” for the United States, vow­ing to re­verse off-shoring by rene­go­ti­at­ing the treaty.

‘Poi­son pills’

In an in­ter­view with Forbes mag­a­zine pub­lished on Tues­day, Trump said he pre­ferred bi­lat­eral trade agree­ments.

“I hap­pen to think that Nafta will have to be ter­mi­nated if we’re going to make it good,” he told the mag­a­zine.

The talks to re­vise Nafta be­gan in mid-Au­gust. Three pre­vi­ous rounds have taken place with no ma­jor break­throughs an­nounced.

Fol­low­ing the most re­cent round in Ottawa last month, ne­go­tia­tors said they had made progress on sub­jects such as telecom­mu­ni­ca­tions, compe- tition pol­icy, dig­i­tal trade, reg­u­la­tion and cus­toms and trade fa­cil­i­ta­tion.

A ma­jor stick­ing point is the United States’ $64 bil­lion trade deficit with Mex­ico, which Washington wants to re­duce or elim­i­nate.

“A shift to­ward pro­tec­tion­ism would re­duce trade and cross-bor­der in­vest­ment flows, harm­ing global growth,” the In­ter­na­tional Mone­tary Fund warned in a re­port on Tues­day.

IMF Eco­nomic Coun­sel­lor Mau­rice Ob­st­feld like­wise warned on Tues­day that all three NAFTA coun­tries faced eco­nomic con­se­quences if the out­come of the talks ended up dis­rupt­ing trade re­la­tions.

Mean­while, Thomas Dono­hue, pres­i­dent of the US Cham­ber of Com­merce, said on Tues­day that sev­eral is­sues un­der dis­cus­sion could scotch the en­tire ef­fort.

“There are sev­eral poi­son pill pro­pos­als still on the ta­ble that could doom the en­tire deal,” he said in a speech de­liv­ered in Mex­ico, cit­ing in par­tic­u­lar a pro­vi­sion to al­low the agree­ment to ex­pire in five years un­less all par­ties agreed to ex­tend it.

“We all know that cer­tainty and sta­bil­ity are cru­cial to suc­cess­ful trade re­la­tion­ships-and nec­es­sary to foster a pro-in­vest­ment en­vi­ron­ment that drives eco­nomic growth and job cre­ation. This clause would achieve the op­po­site ef­fect.”

Fol­low­ing his visit to Washington, Trudeau is due to travel to Mex­ico, where he will meet with Pres­i­dent En­rique Pena Ni­eto.

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