We welcome a better NAFTA

It seems everything associated with the U.S. administration, its decisions and its pronouncements generates headlines, sparks analysis, controversy and response. The speculation around a NAFTA renegotiation has been no different. So it follows that soon after the White House released the U.S. Trade Representative’s objectives for the NAFTA renegotiation recently, we unsurprisingly saw headlines appear calling on our prime minister to follow suit and put Canada’s NAFTA cards on the table.

Regardless of the different negotiation protocols in each of the three countries, members of Canadian Manufacturers & Exporters (CME) are enthusiastically looking forward to Aug. 16, the start of the formal process in Washington.

The impending conversation with our most important trading partners is long overdue. Generating 70 per cent of this country’s total exports and worth an all-time high of $355 billion in 2016, the manufacturing sector is Canada’s top player in NAFTA or any other trade agreement. With 82 per cent of Canada’s manufacturing exports destined for the United States and Mexico, manufacturers see clear opportunities to embrace change within NAFTA to help Canada better innovate, collaborate and compete globally.

Our confidence is bolstered by the fact Canada has done its homework. Manufacturers and their workforce of 1.7 million are encouraged by the government of Canada’s open and responsible manner of consulting with industries on the future of NAFTA, and not making bold pronouncements publicly. The government’s straight-to-the-point consultations provided CME with an opportunity to submit an official brief summarizing feedback from its 10,000 members and sectorpartner companies.

The feedback we received provided government with a thoughtful reminder that manufacturers are, at essence, free traders. Our members believe NAFTA can and should be modernized to not only incorporate change that has occurred over the past 25 years, but also to lay a foundation for growth and innovation over the next several decades, to the benefit of Canada, the U.S. and Mexico. They see this as a historic moment in which Canada can work with its NAFTA partners to identify and eliminate non-tariff barriers and protectionist policies, and stimulate job creation through the flow of skilled labour.

CME’s NAFTA recommendations can be summarized by four overarching pillars:

1. Do no harm to the current business environment that would lessen the trade between its members.

2. Eliminate barriers to trade within the NAFTA region.

3. Modernize and expand the agreement to include more sectors and new technologies.

4. Leverage NAFTA to implement common approaches to trade with outside countries.

Manufacturing is Canada’s largest and most integrated sector, and so it is imperative to the health of the economy that negotiation outcomes allow Canadian manufacturers to maintain free and fair access into, and from, markets in the U.S. and Mexico.

As such, CME is notably recommending that Chapter 19 dispute-resolution processes be maintained but improved. We’re not in favour of removing Chapter 19, as the U.S. wishes, because it allows for an independent dispute-resolution mechanism. We can’t take the referees out of the game.

Other recommendations provided to government focus on removing barriers and exemptions that hurt trade and jobs, allowing more liberal movement of business professionals and skilled workers across borders, and finding modern solutions to strengthen the economic relationships that have developed between NAFTA partners.

Throughout these negotiations, Canada will undoubtedly build on advances achieved through CETA and the TPP negotiations as a framework for modernizing its most important trade agreement. However, its uniquely integrated trade relationship with its NAFTA partners mean we must move aggressively beyond those agreements as we write this next chapter of trade and innovation across borders.

As the countdown to Aug. 16 continues, we cannot lose sight of the incredible advancements NAFTA has brought to North America. It has been a force for innovation that has been emulated around the world. A quartercentury later, we have arrived at an opportunity to work with the U.S. and Mexico to apply those lessons here in a way that can drive Canada’s economy forward.