NAFTA wish list doesn’t have a chance
Isaid we should be prepared to walk away from the negotiations. I didn’t say we should deliberately sandbag them from the outset.
The government of Canada has at last revealed its objectives for talks on renegotiating the North American Free Trade Agreement (NAFTA), a month after the Trump administration released its own.
Of course, the nature of any such exercise is to reveal as much about each side’s perceptions of the other’s negotiating position; it makes no sense to come to the table with demands that haven’t a ghost of a chance of being accepted. From which we must conclude that what Donald Trump wants out of a renegotiated NAFTA, in the Trudeau government’s estimation, is a feminist-aboriginal rights manifesto against global warming.
Either that, or Justin Trudeau and his advisers have concluded the talks have no chance of succeeding, and are already preparing for their demise.
It is hard, otherwise, to make sense of the government’s apparent belief that the talks, instituted at the behest of a government that is not only the most protectionist U.S. administration in nearly a century, but also the most overtly regressive, offer a golden opportunity to convert NAFTA into a wish list of the most fevered ambitions of liberal progressives, circa this minute.
As outlined by Foreign Affairs Minister Chrystia Freeland in her University of Ottawa speech Monday morning, the wish list includes not only incorporating existing side letters on labour and environmental standards into the core of the agreement, but also “efforts to address climate change.”
Also “a new chapter on gender rights.” Not to mention “an Indigenous chapter.” Oh, and we’re also going to keep supply management and every existing exclusion for the cultural industries, thank you, two areas specifically targeted by the Trump administration for elimination.
Well, all right: maybe it’s just an opening bargaining position. The first two items are no more than what the Trump administration has proposed, I’m guessing out of a belief that they would primarily disadvantage the Mexicans. But do Trudeau’s people really think the Trumpians could be induced to accept bringing climate change into it? And gender? And Indigenous rights?
Even if these are as fantastically meaningless as, for example, the gender chapter lately added to the CanadaChile free trade agreement (“The Parties acknowledge the importance of incorporating a gender perspective into the promotion of inclusive economic growth” should give you the flavour of it), it is hard to imagine Trump or his advisers accepting the symbolism, or the precedent. On the other hand, having publicly raised these issues, with the uncompromising constituencies attached to each, it is hard to imagine Trudeau’s people signing onto an agreement that does not contain them.
Is it inconceivable, then, that the Trudeau government is setting the talks up to fail? It would not be an unreasonable supposition on their part. Of three possible outcomes — a successful conclusion to the negotiations, leading to an agreement between the three countries on a renewed NAFTA; failure, followed by Trump making good on his threat to abrogate the treaty; and failure, unaccompanied by abrogation — the third may well be the most likely.
The chances of the first might be rated as slim in light of the several dealbreakers in the lengthy list of negotiating objectives the Trump administration released last month, the effect of any one of which would be to transform NAFTA beyond recognition. These include mandated reductions in the U.S. trade deficit with Canada and Mexico; elimination of the Chapter 19 binational dispute resolution panels; some sort of “mechanism” to curb alleged exchange rate manipulation; and so on.
Canada and Mexico might be more inclined to accept these, if the alternative were to lose NAFTA altogether. As time has worn on, however, Trump’s threat seems less and less likely to be carried out. It is to be doubted whether he has the legal power to do so unilaterally: trade is a shared jurisdiction between the president and Congress. As trade lawyer Jon Johnson points out in a paper for the C.D. Howe Institute (“The Art of Breaking the Deal: What President Trump Can and Can’t Do About NAFTA”), while Trump could give the required six months’ notice of withdrawal, Congress would have to repeal the implementing legislation.
Even if Trump has the legal power, it is very much to be doubted whether he has the political clout to do so — not only because of the many and powerful U.S. interests with a stake in NAFTA’s continuance, whom the Trudeau government has been assiduously courting, but by his own increasing political isolation, not to say impotence.
That leaves the third option: the talks fail, followed by … nothing. The existing agreement remains in place.
Suppose you were a Trudeau adviser, and you thought that the most likely outcome. Suppose, too, you were obsessed as ever with co-opting union and left-wing support from the NDP and otherwise depriving that party of political oxygen. Would it not make sense, from that perspective, to get your grandstanding demands on the record now, so as to be able to pretend, when the inevitable happens, that you fought the good fight?
As it is: you keep the left happy by seeming to campaign for a more progressive NAFTA, while the centre and right are happy so long as NAFTA remains intact. As they say in the negotiating business, it’s win-win.