U.S. makes tougher NAFTA demands in new list
MEXICO C I TY The United States has published an updated list of NAFTA negotiating objectives to reflect some of its tougherthan-anticipated demands in a reminder of the difficult hoeing ahead as parties seek fertile ground for a deal.
The U.S. trade czar’s office released the new list on Friday just as the three chief negotiators began meeting in Mexico City for their first encounter after an acrimonious round revealed huge differences.
Sources say Canada and Mexico will start the months-long task of probing the U.S. for signs of willingness to compromise, though they expect little progress on the toughest sticking points for another few rounds.
A new document from the American side illustrated those big gaps. The U.S. released an updated version of a July document published before negotiations started, in keeping with transparency requirements under American trade law. The new list includes tougher language on Canadian dairy, auto parts and Buy American rules, reflecting negotiating demands adopted in recent weeks.
“(Our) objectives represent a serious effort to renegotiate the agreement to update its provisions to the best 21st century standards and rebalance the benefits of the deal so that each country succeeds. … If these objectives are achieved, the United States will obtain more open, equitable, secure and reciprocal market access and the entire NAFTA region will benefit,” says the document.
Major changes from the previous version of the document released four months ago include:
On auto parts, ensuring that ■ rules of origin promote production in North America as well as “specifically in the United States.” That reflects a U.S. demand at the last round that cars must include 50 per cent U.S. content and 85 per cent content from North America overall, to avoid a tariff.
Ensuring reciprocity in mar■ ket access for public-works contracts. This reflects an American demand that would limit access to Canadian and Mexican companies to one dollar in public contracts for every dollar American companies receive in those countries.
Eliminating Canadian tariffs ■ on imports of dairy, poultry, and egg products. The July document did not specifically mention eliminating Canada’s supply management system. But at the previous negotiating round in October, the U.S. requested supply management’s elimination within 10 years.
All these demands, and some others, have been deemed nonstarters by Canada and Mexico.
A rare hint of potential compromise from the U.S. came in the portion of Friday’s document referring to that sunset clause. The new U.S. position paper avoids mentioning a five-year cancellation threat, and actually contains language much more palatable to Canada and Mexico.