U.S. NAFTA deadline not firm, but Canada’s window closing
OTTAWA — With the release of the text of the U.S.-Mexico trade agreement expected Friday, the political pressure is mounting on Canada to join a new North American Free Trade Agreement.
Analysts and insiders say the latest American-imposed deadline for Canada to join by Monday is not set in stone, and that there is still time for the Liberal government to negotiate with the Trump administration after that. But they caution the window is closing and Canada’s time may be running out.
Mexico and the United States announced their own bilateral deal last month, sparking a renewed round of negotiations between Washington and Ottawa to bring Canada into the NAFTA fold. The formal text is being released so it can be presented to the U.S. Congress by month’s end and fulfil a 60-day notice requirement that would allow lawmakers to approve it by Dec. 1 before the newly elected Mexican government takes power.
Multiple sources say the sticking points between Ottawa and Washington include dairy, preserving Canada’s cultural exemption and Canada’s insistence on preserving the Chapter 19, which allows for independent panels to resolve disputes involving companies and governments.
One source says Chapter 19 has not survived the Mexico-U.S. deal, but Chapter 20, the government-to-government dispute settlement mechanism, has been preserved in its entirety.
Mexican ambassador Dionisio Perez Jacome said his country still wants Canada to come on board, even if the deadline of the next few days comes and goes.
“Hopefully Canada can be included already in the text. If not, then the process gets more complicated, but it’s also possible to come in ... some days after.”
Sources say Mexico is fine with the Trudeau government waiting past Monday’s Quebec election because it understands any concession it might be willing to make on allowing greater U.S. access to dairy would be a political bombshell in the final days of the provincial campaign.
A source close to the negotiations said the vast majority of the U.S.-Mexico text — more than 20 of its 30 chapters — is not the least bit contentious for Canada.
That comes as no surprise to trade experts. Laura Dawson, director of the Canada Institute at the Wilson Centre in Washington, said major work has been completed on the vast majority of the chapters since Canada and the U.S. resumed talks. “They are closer now than they’ve ever been. There’s a potential landing strip in all of the negotiated areas.”
Meredith Lilly, a trade expert at Carleton University, said there’s virtually nothing in the text that will take Canadian negotiators by surprise. “They should have seen the text by now as part of earlier negotiations, as well as recent bilateral negotiations.”
There’s no guarantee Congress would allow U.S. President Donald Trump to move forward with a two-country deal that excludes Canada because it originally granted him the authority to negotiate a three-country pact.
Sarah Goldfeder, a former U.S. diplomat based in Ottawa, said she’s not sure Trump actually wants a deal with Canada before the U.S. midterm elections in November because periodically beating up on Canada and Prime Minister Justin Trudeau is a convenient channel-changer in a news cycle that has no shortage of bad news for him.