NAFTA talks take a turn

ATTENTION SHIFTS TO CANADA AFTER DEAL REACHED BETWEEN U.S. AND MEXICO

Trade talks between the U.S. and Mexico may not endanger Canada’s exports. But President Trump seems to want some kind of deal this week, observes political scientist Geoffrey Hale.

An “understanding” with Mexico on some part of an overall trade pact would not be unusual, he says.

“This is a fairly normal process,” dealing with a variety of side issues.

But will this lead to a larger arrangement with Mexico, leaving Canada out?

“My impression is that Mexico prefers to be in a trilateral agreement,” as outgoing president Enrique Pena Nieto has said repeatedly.

Hale, a professor of political science at the University of Lethbridge, outlined some of the possibilities as Canada’s foreign affairs minister, Chrystia Freeland flew back from Europe to rejoin the North America Free Trade Agreement discussions.

Earlier in the day, Trump said he wanted to see talks with Canada resume — or he would impose heavy tariffs on vehicles imported from Canada. “They want to negotiate very badly,” he said.

But Canadians should not doubt the expertise of Canada’s trade negotiators, Hale says.

“The negotiating team we have is as competent as any group of public servants in Ottawa.”

And it’s been in continual contact with its counterpart in Mexico, he adds.

Issues that need more negotiation currently include provisions in the existing NAFTA document covering disagreements, Hale notes. Canada and the U.S. have used that remedy often.

“We win some, we lose some,” but Trump doesn’t handle defeat well.

Another issue Trump raises often — as he did again Monday — is Canada’s supply management system for dairy products, poultry and eggs.

American producers involved in the “feather” trade aren’t expressing concern about market access to Canada, Hale says, but dairy producers and processors are.

To reach a new agreement, he says Canadian negotiators may have to agree to allow more American milk products into the country — just as they did recently during negotiations in Europe. The import increase was not substantial, Hale notes.

“That’s something that can be managed.”

In exchange, he says, Canada could push for increased exports of pork and beef.

“There should be some kind of symmetry.”

U.S. negotiators have also been calling for a “sunset clause,” setting a date when a new trade agreement would expire. But as Trump has shown, the fact there’s no such clause in the current NAFTA pact hasn’t stopped him from threatening to cancel it unilaterally.

At some point, Hale observes, negotiators may ask: “At what point is no agreement better than a bad agreement?”

But whatever comes of Trump’s latest announcement, he can’t impose new trade rules single-handedly.

“He still has to go to Congress” for approval. “And that’s a big caveat.”

So it’s not likely everything will be settled soon.

And maybe “we’ll have another break point in another week.”

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