It’s time to mod­ern­ize NAFTA

To re­flect re­al­i­ties of this cen­tury; im­ple­ment knowl­edge from trade agree­ments three coun­tries have with other na­tions

The Guardian (Charlottetown) - - OPINION - BY WAYNE EASTER Malpeque MP Wayne Easter is co-chair of the Cana­dian Sec­tion of the Canada-U.S. In­ter-Par­lia­men­tary Group

On Au­gust 16th, the day that NAFTA rene­go­ti­a­tion got un­der­way in Wash­ing­ton, D.C., I had the op­por­tu­nity to speak at the Council of State Gov­ern­ments-West’s an­nual North Amer­i­can Sum­mit. The Sum­mit brings peo­ple to­gether to fo­cus on one of the most im­por­tant eco­nomic re­la­tion­ships in the world: the part­ner­ship among Canada, the U.S. and Mex­ico.

Last year, the U.S. con­tin­ued to be Canada’s largest mer­chan­dise and ser­vices trade part­ner, while Mex­ico was our third-largest mer­chan­dise trade part­ner. Tri­lat­eral trade was val­ued at al­most US$1 tril­lion, and in­vest­ment has also in­creased sub­stan­tially since NAFTA was im­ple­mented in Jan­uary 1994.

To­gether, the coun­tries ac­count for more than 25% of the world’s GDP, the col­lec­tive market is val­ued at US$21 tril­lion, and about 480 mil­lion con­sumers. Our economies and sup­ply chains are in­te­grated, and – since NAFTA’s im­ple­men­ta­tion – jobs have been cre­ated through­out North Amer­ica.

Most econ­o­mists agree that, as trade brings op­por­tu­ni­ties for coun­tries to fo­cus on their areas of com­par­a­tive ad­van­tage, em­ploy­ment pat­terns shift. While the over­all ef­fect of trade and trade agree­ments may be pos­i­tive, job gains oc­cur in some re­gions and sec­tors, and job losses in oth­ers. That’s one rea­son why sec­tors are some­times pro­vided with tran­si­tional as­sis­tance.

It is now time to mod­ern­ize NAFTA to re­flect the re­al­i­ties of this cen­tury; to im­ple­ment what’s been learned from trade agree­ments that the three coun­tries have with other na­tions, and to in­clude pro­vi­sions to address is­sues that didn’t ex­ist nearly 25 years ago, like dig­i­tal.

About six weeks ago, the U.S. re­leased its ob­jec­tives for the rene­go­ti­a­tion: 170 rec­om­men­da­tions un­der 22 head­ings. They are a mix of statu­tory ne­go­ti­at­ing pri­or­i­ties that the U.S. ad­min­is­tra­tion is re­quired to fol­low, pro­vi­sions that were in­cluded in the Trans-Pa­cific Part­ner­ship agree­ment from which the U.S. has with­drawn, and pol­icy state­ments, among other things.

The U.S. rene­go­ti­a­tion ob­jec­tives aren’t re­ally that sur­pris­ing as they re­flect in­for­mal dis­cus­sions that Cana­dian of­fi­cials have had with U.S. of­fi­cials in re­cent months. These U.S. ob­jec­tives are the start­ing point for the rene­go­ti­a­tion. Trade­offs and com­pro­mises will be made, but it’s likely that each of the NAFTA coun­tries will have at least one “make or break” is­sue.

Cana­dian For­eign Min­is­ter, Chrys­tia Free­land, has out­lined Cana­dian ob­jec­tives for the rene­go­ti­a­tion. She has high­lighted the fed­eral gov­ern­ment’s sup­port for our sup­ply­man­age­ment sys­tems, and labour and en­vi­ron­men­tal pro­tec­tions.

Po­lit­i­cal pres­sures that may ex­ist for a con­clu­sion by De­cem­ber in­clude pres­i­den­tial elec­tions in Mex­ico in July 2018 and U.S. mid-term elec­tions in Novem­ber 2018. To meet this dead­line, ne­go­tia­tors may have to fo­cus on what an­a­lysts have called “the low-hang­ing fruit.” Only time - in the form of ad­di­tional rounds of bar­gain­ing will tell.

Canada, the U.S. and Mex­ico must work to­gether in mod­ern­iz­ing NAFTA so our three coun­tries can con­tinue to work to­gether in com­pet­ing against other coun­tries and re­gions through­out the world. It’s time for us to make what is - in a num­ber of re­spects - a de­cent trade agree­ment, even bet­ter.


Panel mem­bers at­tend­ing re­cent North Amer­i­can Sum­mit in Wash­ing­ton, D.C. Wayne Easter is sec­ond from right.

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