Saskatoon StarPhoenix

FOREIGN AFFAIRS MINISTER CHRYSTIA FREELAND IS FIGHTING ON SEVERAL FRONTS AS SHE TRIES TO GET THE BEST DEAL POSSIBLE IN NEGOTIATIO­NS FOR A NEW NAFTA WITH THE UNITED STATES AND MEXICO.

Intrigue, stalls persist as talks continue

- James mccarten

WASHINGTON • Chrystia Freeland was not happy.

With trilateral NAFTA talks on hiatus for most of the summer, the foreign affairs minister was in Berlin, barely one full day into a weeklong diplomatic mission to Europe, when news emerged that the United States and Mexico had forged their own trade alliance in Canada’s absence.

By Aug. 28, Freeland was back in Washington, hosting a meeting at the Canadian embassy, where sources say she gave members of the Mexican negotiatin­g team a piece of her mind.

“She brought them in for that purpose,” said one source.

By all indication­s, things haven’t improved much.

Three-way talks with U.S. Trade Representa­tive Robert Lighthizer and Mexican Economy Secretary Ildefonso Guajardo have not taken place since, and none are imminent. Freeland is spending Monday in Ottawa for the return of Parliament.

Last week, in Washington for a full day of meetings with Lighthizer, Freeland insisted the bilateral negotiatio­ns have been “constructi­ve,” “productive” and brimming with “goodwill.”

But multiple sources, speaking on condition of anonymity, say the mood has been decidedly less cordial than the minister lets on.

There’s confidence in Ottawa that Congress won’t approve a deal without Canada. But with a good Mexico-u.s. deal on the table and the clock ticking toward gamechangi­ng U.S. mid-terms in November, that’s not a given, warned Dan Ujczo, an Ohiobased trade lawyer with Dickinson Wright.

“I think while Congress is generally supportive of Canada, given that Canada is playing defence on a lot of these issues, I don’t know how long that will hold,” said Ujczo, who is well-versed in NAFTA’S nuances.

“I envision a scenario where Congress will be very noisy about getting Canada in, but at the end of the day they’ll let the U.s.-mexico deal proceed, so long as the status quo with Canada is maintained while we negotiate.”

The prevailing narrative throughout the 13-month saga has revolved around a number of primary sticking points — maintainin­g an independen­t dispute resolution mechanism and the way Canada protects its dairy farmers.

Dairy will be on the lips and minds of many Monday on Parliament Hill, especially given U.S. President Donald Trump’s penchant for railing against Canada’s supply management system for dairy, poultry and eggs, and the pivotal importance of Quebec — home to nearly half the country’s dairy farmers and currently in the throes of a provincial election campaign — to the federal government’s own electoral fortunes.

One place where supply management hasn’t been as hot a topic as advertised? The NAFTA talks themselves, officials suggest.

Canada has already offered to allow limited additional access for American dairy producers, they say, and to drop a new class of milk that effectivel­y shut them out of the Canadian market for milk ingredient­s like protein concentrat­es, skim milk and whole milk powder.

Rather, it’s dispute resolution that remains the biggest hurdle, insiders say. The U.S. wants to scrap it and allow American courts to judge trade disputes. Mexico has agreed. But Canada is insistent that some form of independen­t bi-national dispute resolution be part of the deal.

The U.S. has also steadfastl­y refused to promise that a NAFTA deal would bring an end to punishing tariffs against Canadian steel and aluminum on national security grounds.

As well, there remain deep difference­s on intellectu­al property. The U.S. wants to extend patent protection for big pharmaceut­ical companies, which could hurt Canada’s generic drug industry.

All the sound and fury over dairy tariffs and dispute resolution has obscured the patent protection issue, to the potential detriment of Canadian drug consumers, warned Marc-andre Gagnon, a professor at Carleton University who specialize­s in pharmaceut­ical policy.

“We’re just providing wheelbarro­ws of money to drug companies without getting anything back in return. If you increase intellectu­al property protection, that does not bring any additional investment to Canada. It just helps foreign companies make more profit.”

If Canada has already agreed to extend data protection for biologics, that might explain why Ottawa remains confident that Congress — awash in Big Pharma lobbying and campaign contributi­ons — won’t proceed without it.

Raising the question: are talks indeed stalled? Or is Canada just stalling?

“Nobody can really explain to me how Canada’s going to get a better deal in a few months from now than they would today,” Ujczo said.

WE’RE JUST PROVIDING ... MONEY TO DRUG COMPANIES WITHOUT GETTING ANYTHING BACK IN RETURN.

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