Biggapsin NAFTAtalks

CANADA CITES ISSUES TO QUICK NAFTA DEAL IN FACE OF ‘HOPEFUL’ U.S. TRADE REP

The United States needs to show more flexibility towards resolving “core” issues if it expects to get an agreement on the controversial trade deal sometime this spring, before looming political uncertainties set in, Canada’s chief NAFTA negotiator said Wednesday.

“There’s obviously some significant gaps on many issues,” said Steve Verheul, who was in Ottawa for a labour-focused roundtable discussion on the state of Canada-U.S. trade.

There are “a whole range of chapters where we’re not that far apart,” Verheul said. “But on the core, most important issues, there is a significant amount of work still to be done.”

Verheul reiterated the sticking points: the U.S. positions on autos, a proposed sunset clause, access to U.S. government procurement and the American desire to opt out of a dispute resolution chapter.

Verheul’s blunt assessment appeared to fly in the face of the more optimistic note U.S. Trade Representative Robert Lighthizer tried to sound earlier Wednesday during an interview with U.S. broadcaster CNBC.

“I’m hopeful. I think we are making progress. All three parties want to move forward,’’ said Lighthizer, the top U.S. trade official.

“If there’s a real effort made to try to close out and to compromise and to do some of the things we all know we should do, I’m optimistic we can get something done, in principle, in the next little bit.”

Verheul was decidedly less bullish, saying Canada has yet to see “what the U.S. means by an agreement in principle.”

“An agreement in principle to our understanding means some sense of direction on the big issues, the important issues. We have not seen that from the U.S. so far,” Verheul said.

“If we’re going to achieve that, we would clearly require some considerable flexibility in the U.S. positions.”

In an effort to get a speedy deal, the U.S. appears to have backed away from one of its most contentious demands and is no longer insisting that 50 per cent of cars be made in the U.S., and is now floating a different formula based on autoworker salaries.

In the early rounds, the Americans angered their Canadian and Mexican counterparts with a twopronged proposal: on the one hand, drastically increasing the percentage of North American parts a car must have to avoid a tariff, while on the other hand insisting that half the parts be American. Other countries called that a non-starter.