Canada’s NAFTA envoy seeks mutual gains
Quebec’s emissary calls for collaboration to make North America great as a whole
The U.S. should work with Canada and Mexico to make North America great, not just America, Quebec’s chief negotiator for the North American Free Trade Agreement said Monday in Houston.
“We’ve got our economies so integrated, the three countries,” said Raymond Bachand of Quebec, “and if we want to compete on the world stage, we need to get North America stronger.”
Bachand and Antonio OrtizMena, a former senior adviser in the Mexican government, were in town emphasizing the benefits of free trade at the Greater Houston Partnership.
The three countries began renegotiating NAFTA one year ago, with eight rounds of negotiations that lasted into the spring, Bachand said. Much of that came to a halt as the U.S. switched its focus to Mexico and the automobile industry.
Particularly thorny issues include what percent of a vehicle’s value must be made in the U.S., Mexico or Canada to cross borders without tariffs, and how much of that vehicle needs to be made by workers earning higher wages.
Bachand said Canada is fine stepping back during those talks as “anything that’s gained with Mexico is a gain for both the U.S. and Canada,” but he is eager for the three countries to resume tackling other hot-button issues that have been sidelined.
One priority, he said, is broadening the ability for Canadian companies to bid for U.S. government projects, though he’s doubtful about that happening.
“I don’t think this administration, and the political world today, is going to do that,” he said.
Maybe more plausible, if framed as temporary entry rather than immigration, could be expanding the list of professionals eligible for
NAFTA work visas. The U.S. has nonimmigrant-classification permits for Canadian and Mexican citizens seeking temporary entry into the U.S. for business.
The permits are for professions including accountants, engineers, lawyers and pharmacists. Largely absent from the nearly 25-year-old agreement are IT and other technology-related jobs.
Bachand pushed back against several issues the U.S. supports. That includes a sunset clause.
“Which is an absurdity,” he said. “You don’t sign a treaty which ends in five years. Can we review every five years? Can we have a review process? Yes. But not with the legal consequence of ending it.”
He also challenged President Donald Trump’s June 8 Twitter attack on Canada for imposing tariffs on dairy products, part of a supply management system that is portrayed as an alternative to grants or subsidies.
“If you want access to the Canadian market, taking the president’s language of free and fair trade, then I would say you have to dismantle your grants to the dairy industry because your dairy industry is heavily subsidized,” he said.
Canada opened up 3.25 percent of its market to the Trans-Pacific Partnership, but the U.S. withdrew from that treaty. Bachand said Canada isn’t likely to make such concessions again as “farmers weren’t happy about that.”
His perspective, given at a Greater Houston Partnership luncheon and during an interview at Rice University’s Baker Institute for Public Policy, was augmented Monday with insight from the local business community and an expert on Mexico-U.S. relations.
Bob Harvey, the partnership’s president and CEO, called the renegotiation process frustrating given that the city’s trade with Mexico and Canada last year totaled $23.3 billion, or 12.1 percent of total international trade.
“We are concerned about NAFTA,” Harvey said.
Ortiz-Mena, a senior vice president with Albright Stonebridge Group and a former adviser with the Mexican government who helped with the original NAFTA, said a broader energy chapter in the renegotiated NAFTA could strengthen regulatory cooperation and build upon Mexico’s recent energy reform that opened doors for domestic and foreign private investment.
Ortiz-Mena was also adamant that NAFTA continue its investorstate dispute settlement provision, allowing companies to resolve issues through an independent arbiter outside of local courts.
Once the auto negotiations wrap up, Ortiz-Mena said NAFTA will have broad support in Mexico even with a change in presidents there. But he expressed concern about NAFTA’s political fate in the U.S. Even if Democrats gain seats during midterm elections, he said, they may not support NAFTA because they don’t want to give Trump a win.
Bachand likewise described U.S. politics as the major question mark affecting the renegotiated NAFTA. He questioned whether Trump wants to wrap things up quickly or let them linger through midterm elections so he can brag about being tough with Canada and Mexico.
“And Canada is going to be the villain,” he said.