SLAMMING INTO A BRICK WALL
TRADE TALKS WITH U.S. GRIND TO A HALT AMID REPORTS THAT TRUMP ISN’T WILLING TO BUDGE
Afrenetic round of trade talks between Canada and the U.S. came to a crashing halt Friday, as the two sides were unable to find enough common ground to add Canada to an earlier deal between the States and Mexicans.
The breakdown in negotiations on revamping NAFTA followed a surprise report that President Donald Trump had said privately any deal with Canada would be “totally on our terms.”
He later seemed to verify the quotes. And sources briefed on the discussions — which began in earnest on Wednesday with a deadline of Friday set by the White House — said U.S. negotiators made little attempt to compromise during the whirlwind discussions.
Trump gave notice to Congress Friday that he would sign a deal with Mexico in 90 days, and include Canada “if it is willing, in a timely manner, to meet the high standards for free, fair and reciprocal trade” in the accord.
To that end, the negotiations were to resume next Wednesday in Washington, as both sides did their best to put a positive spin on the tense situation.
“The talks were constructive and we made progress,” the office of U.S. Trade Representative Robert Lighthizer said in a brief statement. “Our officials are continuing to work toward agreement.”
At a news conference late Friday afternoon, Foreign Affairs Minister Chrystia Freeland refused to respond directly to Trump’s provocative comments, and also suggested the parties were moving toward a resolution.
“We’re not there yet,” she said. “(But) this is a very complex agreement and we’re going to continue working at it … Our objective in these talks is to update and modernize NAFTA in a way that is good for Canadians, good for Americans and good for Mexicans. We know that a win-win-win agreement is within reach.”
One source who received reports from both sides of the talks said there had been little movement from the Americans during the three days of meetings, some of which stretched through the night.
“Canada conceded a whole bunch of things. Canada gave a ton of things,” said the person, who asked not to be named to preserve their relationship with government officials. “Canada was making concessions and Canada needed something, and the U.S. was agreeing to nothing.”
Ohio-based trade lawyer Dan Ujczo, also briefed on the talks, said the Canadian negotiators met a brick wall after arriving in Washington.
“I think the U.S. came in good faith … but I’m not sure whether they were ready to give good results, from Canada’s perspective.”
Ujczo said there is still a good chance of reaching agreement and that much of the problem this week was the volume of work the two sides had to accomplish.
“You’re dealing with people who are under a lot of stress, they’re very tired,” he said. “It was a very good call to take a break.”
The half-week of negotiations came after the U.S. and Mexico announced Monday they had reached a wide-ranging agreement to update the North American Free Trade Agreement. That was after five weeks of bilateral talks that left Canada stranded on the sidelines.
Trump set a deadline of Friday to bring Canada on board, which would enable the accord to be signed before Mexico’s new president takes office Dec. 1, and still give Congress the required 90 days’ notice.
U.S. law also stipulates that a text of any trade agreement be made public 60 days before it’s signed, which experts say provides wiggle room for more negotiations with the Canadians.
In fact, members of Congress have already balked at the idea of approving an agreement just with Mexico, given the deeply intertwined North American economies — and the fact the White House had authority only to negotiate a trilateral deal.
“(Trump) does not have the support of Congress to get a bilateral through. He does not,” said Jennifer Hillman, general counsel to the U.S. trade representative during Bill Clinton’s presidency. “There simply are not the votes in Congress for a U.S.-Mexico deal without Canada.”
The administration’s notice of a Mexico-only deal is a “sham,” added Lawrence Herman, a former Canadian diplomat who practises trade law at Herman & Associates.
“The U.S. can’t sign a bilateral agreement with Mexico while still in NAFTA,” he said.
“The whole business of this notification and what went on today is a fantasy.”
The core of the Mexico deal concerned new rules on the content of automobiles exported duty-free into the U.S. under NAFTA, designed to address Trump’s concern that American car-making jobs are slipping away to low-wage countries.
Canada was onside with those “rules of origin” — which require 75 per cent of auto parts be made in North America and 40-45 per cent by workers earning at least $16 an hour. But the talks that began this week stuttered in the face of at least two U.S. demands.
One was that Canada dismantle its supply-management system for dairy products, the other that NAFTA’s “chapter-19” dispute-resolution section — to deal with anti-dumping and anti-subsidy duties — be scrapped.
Sources suggested Canada was willing to grant the U.S. more access to its dairy market, while preserving supply management itself, a political hot-button on this side of the border. The USTR, though, said in a statement to Bloomberg news agency Friday that Canada had made no concessions on agriculture.
Still, the talks seemed on Thursday to be heading toward an agreement, before momentum slowed Friday morning.
Then came a surprise report from the Toronto Star of off-the-record comments that it said Trump made to Bloomberg during an interview, suggesting an uncompromising approach.
“Off the record: totally on our terms. Totally,” the Star quoted him as saying about the talks.
And, ““Here’s the problem. If I say no — the answer’s no. If I say no, then you’re going to put that, and it’s going to be so insulting they’re not going to be able to make a deal ... I can’t kill these people (Canadian negotiators).”
Trump later appeared to confirm the comments, complaining on Twitter that offthe-record remarks had been made public and adding “at least Canada knows where I stand!”
Asked about the comments, Freeland said only that her negotiating counterpart was Lighthizer and that he had been bargaining in good faith. She also declined to comment on specific issues being discussed behind closed doors, saying the two sides had agreed not to negotiate in public.
WHAT WENT ON TODAY IS A FANTASY.