U.S. releases list of demands for NAFTA

WASHINGTON (AP) — The Trump administration has released its broad goals for a new North American Free Trade Agreement in mostly vague language that offers just enough specific clues to point to potentially tough negotiations ahead.

The U.S. says it wants more exports of its dairy products, wine and grains; freer trade in telecommunications and online purchases; new rules on currency manipulation; an overhaul of the dispute-settlement system; and more access for U.S. banks abroad.

A Washington-based trade expert who advises the Canadian government didn’t flinch when asked what this means for NAFTA talks, which are scheduled to start next month: “Longer, rather than shorter,” said Eric Miller, a consultant at Rideau Potomac who advises Industry Canada.

“It will be pretty intense and hard-fought . ... Don’t expect it to be finished in less than eight months,” Miller said. “And expect Canada to have to fight hard for issues it cares about.”

Some of the issues might be hotly debated, even between Canadians themselves.

For example, the demand on online purchases could pit bargain-hunting Canadian consumers against bricks-and-mortar shops. The U.S. wants to increase the amount Canadians can buy online without paying an import tax, by 4,000 per cent.

Canada has one of the world’s most punitive duty systems for online shoppers. It will be urged to increase its duty-free limit to $800 from its current $20, according to the document released Monday by the U.S. trade czar.

The 16-page list contains some elements that might appear contradictory or confusing.

It says the U.S. will demand more opportunities for American suppliers for government procurement abroad, such as construction projects. But in the next breath, it insists on preserving Buy American rules that limit such rights for foreigners.

It also demands the elimination of the dispute-settlement system that has ruled in favour of Canada on softwood lumber. But it’s unclear how the U.S. would replace Chapter 19 — which, to Canada, was a make-or-break issue in the original 1980s trade talks.

Canadian negotiators suspended talks over that dispute-settlement issue. Later, on the final evening of negotiations, with a midnight deadline, then-prime minister Brian Mulroney informed the U.S. there would be no deal — without an international arbitration system.

Canadian trade expert Peter Clark concurred: “This will not be a short negotiation.”