U.S. ar­rives at talks with two bomb­shell de­mands

Times Colonist - - Nafta - ALEXAN­DER PANETTA

WASH­ING­TON, D.C. — The NAFTA talks have en­tered their most dif­fi­cult phase, with the United States be­gin­ning to drop its bomb­shell pro­pos­als on the ne­go­ti­at­ing ta­ble at a just-be­gun fourth round out­side Wash­ing­ton.

U.S. of­fi­cials had in­di­cated that this week-long round would see the most con­tentious dis­cus­sions open, and that is com­ing to fruition, with the Amer­i­can side lev­el­ling one de­mand deemed a non-starter — and pre­par­ing to de­liver an­other one.

The just-re­leased de­mand would cre­ate a so-called ter­mi­na­tion clause. It would end NAFTA af­ter five years, un­less its mem­ber coun­tries ex­plic­itly opted to re­new it. That pro­posal was de­liv­ered late Wed­nes­day night.

That comes af­ter the U.S. pro­posed far stricter Buy Amer­i­can rules at the last ne­go­ti­at­ing round, and in the leadup to one of the most im­por­tant pro­pos­als of the en­tire ne­go­ti­a­tion: on rules for auto parts, which could come as early as to­day.

”More con­tentious is­sues will be com­ing up very shortly,” U.S. Com­merce Sec­re­tary Wil­bur Ross said dur­ing a panel dis­cus­sion this week at the Den­tons law firm.

“So far, the talks have mainly done ba­sic back­ground things. Kind of what I would call boil­er­plate things.”

The other NAFTA coun­tries say they are baf­fled by where the U.S. is headed.

Sources said Canada and Mex­ico are try­ing to fig­ure out what this hard­line U.S. ap­proach sig­nals: open­ing po­si­tions that will be flex­i­ble with some bar­gain­ing; hard de­mands; or a de­sire to poi­son the talks, let them col­lapse, and sim­ply do away with NAFTA.

Some al­lies of U.S. Pres­i­dent Don­ald Trump are more pos­i­tive.

Newt Gin­grich said this week that he sees lit­tle ap­petite within the U.S. cabi­net for the type of tur­moil that can­celling NAFTA might cause. He said Trump’s team is filled with wealthy pro-traders, who be­lieve the U.S. needs tougher deals.

Ross said he doesn’t an­tic­i­pate a NAFTA col­lapse, though he added a caveat: “We don’t hope it will [end]. We don’t de­sire that it will, we don’t be­lieve that it will, but it is at least a con­cep­tual pos­si­bil­ity.”

Canada and Mex­ico are ve­he­mently op­posed to the five-year ter­mi­na­tion idea, see­ing it as a desta­bi­liz­ing in­vest­ment-killer and an un­ac­cept­able red line. The next big scare could come to­day. The group han­dling rules for auto parts will meet for the first time in this round, and it’s ex­pected that the U.S. will have de­mands viewed as non-starters by Canada, Mex­ico and the auto in­dus­try.

One re­port said the planned de­mand would re­quire 85 per cent of a car’s parts to come from North Amer­ica, and half of them to come from the U.S. The in­dus­try says many of th­ese com­po­nents sim­ply aren’t made on the con­ti­nent.

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