U.S. mum on big issues: negotiator
American officials have yet to propose major changes, as Canada waits for specifics
OTTAWA— Canada’s lead NAFTA negotiator doesn’t expect the United States to make demands for the dairy sector during the third round of talks this week, and said American officials still haven’t proposed changes to some of the thorniest issues of the agreement, including car manufacturing and dispute resolution mechanisms.
Steve Verheul, chief trade negotiator with Global Affairs, said there is still “plenty to work with for the time being” but stopped short of expressing confidence that the shared goal of a new deal by the end of the year can be met.
“We’ll make good progress for the next few rounds, I think. But the endgame is always the hardest part, and impossible to predict,” he told reporters Sunday afternoon, as Ottawa hosted the third round of talks on the 23-year-old trade deal between Canada, the U.S. and Mexico.
“As in any negotiation, there are moments when things get a little heated, but for the most part, I’d say it’s quite constructive,” Verheul said. “We’re making good, solid progress.”
The U.S. government signalled this week that one of its top priorities in the agreement is to increase the rules-of-origin for auto parts — essentially pushing to get more American content in the components of cars made in North America. U.S. President Donald Trump has also criticized Canada’s supply management system that protects its domestic dairy industry, which Ottawa has vowed to support, while the American government stated this summer that one of its goals is to ditch the Chapter 19 dispute panel from NAFTA.
Yet so far, U.S. negotiators have not made specific demands in those areas at the negotiating table, Verheul said. “We have made a detailed proposal on Chapter19; we have not seen a U.S. proposal.” One of Canada’s priorities is to preserve that chapter, which dictates how disputes between the trading partners are resolved.
Verheul added that of the 28 negotiating groups working on areas of the agreement, there are a “couple” that could be resolved before the third round of negotiations wraps up on Wednesday, but he would not specify which ones.
The lack of specificity from the U.S. in key areas for Canada had union leaders on the sidelines of the talks accusing the Americans of not taking the renegotiations seriously. For the second day in a row, Jerry Dias, the president of Unifor, Canada’s largest private sector union, predicted the talks would fall apart in the coming weeks, with Canada and Mexico walking away from an intransigent American administration.
“It looks as if the tactics (for the U.S.) are: We’re the big player and we’re going to force the agenda and if you don’t like it, too bad. So my guess is that everybody walks away,” Dias said.
Christopher Monette, director of public affairs for Teamsters Canada, called on the U.S. to engage more seriously with Ottawa’s proposals to bring tougher labour standards into the deal. “The Canadian government is not kidding around in terms of their labour proposals. This is strong stuff that our union both in Canada and the United States strongly supports. We think this needs to be taken more seriously by American negotiators.”
Trump has repeatedly threatened to drop out of NAFTA, citing concern about American trade deficits and the loss of manufacturing jobs in his country. Trump has also predicted the renegotiation will fail to produce a new deal, while officials from Canada and Mexico have stated that it is still early in the process that continues in Ottawa until Wednesday, before returning to the U.S. for a scheduled fourth round of talks.
“We’re just starting,” Kenneth Smith Ramos, the lead Mexican negotiator, told reporters Saturday.
The agenda for the third round of negotiations, which was obtained by the Star this week, showed that negotiators were scheduled to talk about customs, digital trade, the environment, government procurement, state-owned enterprises and other issues on Sunday.
Key points surrounding the Ottawa round of negotiations include the American demand to change NAFTA’s rules-of-origin component, which dictates how much of certain products must be made in North America to qualify for free trade under the deal. The U.S. has signalled that it wants more American-made content in auto parts, though it has yet to say exactly by how much.
The current North American content rules for auto parts under NAFTA is 62.5 per cent.
Dias, whose union represents autoworkers in Canada, said Sunday that he’s not against raising rules-of-origin in that industry, but cautioned that doing so without bringing tougher labour standards into a new NAFTA could simply mean more manufacturing jobs leave Canada for lower-wage jurisdictions in the U.S. and Mexico.
“There won’t be a trade deal unless Mexico takes Canada’s proposals on elevating the standard of living for Mexican workers in a very serious way,” he said. With files from Tonda MacCharles