Toronto Star

Trade ministers warn of tough NAFTA talks ahead,

‘Highly productive’ talks still lack clear stance on rules of origin, dispute settlement

- TONDA MACCHARLES AND BRUCE CAMPION-SMITH OTTAWA BUREAU

OTTAWA— Trade ministers from Mexico, Canada and the United States touted progress at the NAFTA renegotiat­ing table Wednesday, but admitted they have yet to tackle the make-or-break issues at the heart of a new trade deal.

As the third round of talks wrapped up, Foreign Affairs Minister Chrystia Freeland, Ildefonso Guajardo, Mexico’s secretary of economy, and U.S. trade representa­tive Robert Lighthizer all cautioned that the tough challenges still lie ahead.

Guajardo said while it had been a “highly productive round,” there were clear “difference­s,” and progress depended on the willingnes­s of the United States to table specific proposals of what it is seeking in many areas.

“As negotiatio­ns move forward, it is important that we have the will to table positions that encourage constructi­ve discussion­s and programmat­ic solutions, he said. “For the next round in D.C. we will have substantia­l challenges to overcome.”

Freeland, for her part, said Canada was up against an “unconventi­onal” U.S. administra­tion that is “overtly protection­ist.”

The U.S. has not clarified specifical­ly what it wants to see in a modernized NAFTA in several “potentiall­y most difficult areas,” Freeland said, noting that without formal positions on the table, Canada cannot respond.

Those key areas of dispute where the Americans have tabled no specifics include:

Rules of origin, which the U.S. wants to change to require higher American-made content for dutyfree movement of auto vehicles and parts. Canada and Mexico want to retain the current 62.5-per-cent re- quirement for North Americanso­urced content.

Dispute settlement mechanisms. The U.S. wants to eliminate the use of binding arbitratio­n panels, and use domestic courts, instead, to resolve state-to-state disputes over anti-dumping or countervai­ling duties. This is NAFTA’s Chapter 19. It is in theory a deal-breaker for Canada and Mexico, but Canada has proposed setting up permanent profession­al tribunals as the key referee. Another dispute mechanism to resolve disagreeme­nts in cases where government regulation­s or law harm the commercial or trade interests of internatio­nal investors is also in play at the talks, and the U.S. has proposed no specific text on Chapter 11 either.

Supply-managed agricultur­e sectors. The U.S. has taken aim at Canada’s dairy markets, complainin­g that its supply-management system, which restricts U.S. producers’ access to consumers, is unfair. But the Americans haven’t outlined their specific demand here.

Freeland also pushed back at Trump’s “Buy-American-Hire- American” agenda on government procuremen­t contracts, saying “mutual access” was achieved in the Canada-European Union trade deal, and should be achievable within the NAFTA renegotiat­ion talks.

Negotiatin­g teams finalized one section devoted to concerns of small and medium-sized businesses, expect to finish the section on competitio­n in the coming days and advanced discussion­s on other areas, such as digital trade, telecoms, digital trade, good regulatory practice, and customs and trade facilitati­on, according to a statement by all three ministers.

The fact the U.S. has yet to reveal its position on some issues, or set out unreasonab­ly tough expectatio­ns on others, sparked questions about Washington’s intentions.

But Freeland said she believed the U.S. was bargaining in good faith, that no party was deliberate­ly slowing the pace, and more progress could be made before the next round begins in Washington Oct. 11.

Lighthizer said that talks are proceeding at an “unpreceden­ted pace,” but he admitted, “There is an enormous amount of work to be done, including some very difficult and contentiou­s issues.”

He reiterated Washington’s agenda is to reduce the U.S. trade deficit and invigorate American industry and ensures “reciprocal market access for American farmers, ranchers and businesses.”

 ?? JUSTIN TANG/THE CANADIAN PRESS ?? Foreign Affairs Minister Chrystia Freeland says the country faces an “overtly protection­ist” U.S.
JUSTIN TANG/THE CANADIAN PRESS Foreign Affairs Minister Chrystia Freeland says the country faces an “overtly protection­ist” U.S.

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