Two key changes in new trade pact

The Peterborough Examiner - - Canada & World -

OT­TAWA — Ini­tial anal­y­sis on the fi­nal text of the new North Amer­i­can trade pact Canada signed on Fri­day is point­ing to two changes — one po­ten­tially help­ful for the auto sec­tor, the other po­ten­tially prob­lem­atic for labour rights.

Cars and auto parts

Canada, just like Mex­ico, signed what is known as a side let­ter — a one-on-one pro­vi­sion con­nected to, but not for­mally part of the trade deal text — on au­to­mo­tive im­ports. Canada will be able to ex­port up to 2.6 mil­lion pas­sen­ger ve­hi­cles into the United States tar­iff-free. The limit is well above cur­rent lev­els of about 1.8 mil­lion ve­hi­cles, and the coun­try isn’t fore­cast to reach the quota un­til at least a decade from now, as ve­hi­cle pro­duc­tion in Canada de­clines along with con­sumer de­mand, said Juan Manuel Her­rera, an econ­o­mist with Sco­tia­bank Eco­nom­ics.

A change also spec­i­fies that tar­iffs won’t ap­ply to those ve­hi­cles even if they don’t meet rules of ori­gin pro­vi­sions in the trade deal, which lay out con­ti­nen­tal con­tent and labour re­quire­ments to be con­sid­ered tar­iff-free.

“Peo­ple were afraid that the side letters would also give power to the U.S. in how Canada de­cides how to al­lo­cate this 2.6 mil­lion ex­emp­tion,” Her­rera said. “But

... the Cana­dian gov­ern­ment, or Cana­dian firms, are the ones who will dis­trib­ute this ex­emp­tion as they see fit — it’s not that the U.S. is the one who gets to pick.”

Also of note: The side let­ter is ef­fec­tive im­me­di­ately.

Sex­ual ori­en­ta­tion, gen­der iden­tity and labour rights

The orig­i­nal text of the pact pledged all coun­tries to sup­port “poli­cies that pro­tect work­ers against em­ploy­ment dis­crim­i­na­tion on the ba­sis of sex, in­clud­ing with re­gard to preg­nancy, sex­ual ha­rass­ment, sex­ual ori­en­ta­tion, gen­der iden­tity.”

But the fi­nal agree­ment has a change in lan­guage that var­i­ous analy­ses sug­gest will wa­ter down its reach. The new word­ing calls on each coun­try to im­ple­ment poli­cies each “con­sid­ers ap­pro­pri­ate to pro­tect work­ers against em­ploy­ment dis­crim­i­na­tion on the ba­sis of sex.” A foot­note on the agree­ment says U.S. fed­eral hir­ing poli­cies “are suf­fi­cient to ful­fil the obli­ga­tions” on labour rights, and “thus re­quires no ad­di­tional ac­tion” by the U.S.

Some con­gres­sional Repub­li­cans have al­ready sug­gested they won’t sup­port the deal with any word­ing on sex­ual ori­en­ta­tion or gen­der iden­tity be­cause they feel it goes too far. Crit­ics who sup­ported the orig­i­nal pro­vi­sion feel the new word­ing doesn’t go far enough.

“Hon­estly, what­ever you think of the LGBTQ pro­vi­sions in the new NAFTA, this out­come — to in­clude them but nul­lify them with a foot­note — is ridicu­lous,” said Ge­of­frey Getz, a fel­low at the Wash­ing­ton, D.C.-based Brook­ings In­sti­tu­tion. “It’s the kind of thing that will make pro­gres­sives even more sus­pi­cious of en­gag­ing with trade lib­er­al­iza­tion.”

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