Freeland sets stage for revised trade deal
With negotiations set to begin, Ottawa signals push for stronger labour, environmental protections
OTTAWA— Foreign Affairs Minister Chrystia Freeland will make the case today as to why a modernized trade deal with the U.S. and Mexico — containing enhanced protections for labour and the environment — is vital for Canada’s continuing economic success.
Freeland will use two appearances — first in a speech at the University of Ottawa and later before a parliamentary committee — to sketch out the broad strokes of Canada’s principles for the negotiations that begin later in the week on a new North American Free Trade Agreement (NAFTA).
The Liberal government has been consulting with stakeholders ahead of the negotiations — consultations that will continue — but Freeland wants to prompt a larger discussion about the coming trade talks.
“It doesn’t mean that every Canadian will be paying attention (today), but we know that very shortly they will be,” said a government official, who spoke on condition of anonymity.
“The opportunity to modernize matters shouldn’t be lost on people,” the official said.
Canada has kept its cards close to its chest, with Prime Minister Justin Trudeau saying recently that he’s “not going to negotiate in public.”
That strategy is not expected to change. But Freeland will speak to broad objectives and themes that Ottawa will be pushing to see included in a revised pact.
Those include provisions to strengthen protections for labour and the environment. Canada is also expected to push for language that sets out ambitions around gender equality, a priority for the Liberal government at home.
Freeland will speak to the vast changes in the digital economy, how that has changed trade and needs to be addressed in the new agreement in a “substantive way,” the official said.
She will also address the protectionist tone in Washington and “push back” on why that’s not a viable long-term solution for trade between the three countries. That’s the same argument the Trudeau government has taken to the White House, Congressional leaders and state governors across the United States as part of an orchestrated campaign ahead of the negotiations.
The first round of talks kick off Wednesday when trade officials from Canada, Mexico and the U.S. will meet at Washington’s Marriott Wardman Park Hotel.
U.S. President Donald Trump rode to victory last November with a campaign that pushed a Buy America focus and that protectionist theme will hang over the bargaining table.
At various points, he’s called NAFTA a “catastrophe” for the U.S., a “total disaster” and “one of the worst deals, ever.”
Canada and Mexico have struck a more diplomatic tone. They say the negotiations are a chance to update a decades-old trade pact, address issues that weren’t a factor when it was first crafted, such as e-commerce and the digital economy, and for Mexico, freer access to energy and telecommunications.
“NAFTA has proven that it’s very good. It has proven that it’s beneficial. It makes sense to take a look at how we can improve it, we can update it, modernize it,” Dionisio Perez Jacome, Mexico’s ambassador to Canada, said in an interview.
“We do believe it’s possible to come with a win-win-win and we will work hard to achieve that.”
Perez Jacome said his country is keen to negotiate a new deal but not one at any cost. “The outcome has to be a win-win-win for the three countries . . . We know very clearly what we want and what we don’t want,” he said.
Observers worry about the chaotic political climate in Washington and how that might influence negotiations.
Trump is the wild card. An early morning tweet or an off-the-cuff comment could be enough to rock the negotiations, said Paul Frazer, a former Canadian diplomat who heads a government-relations firm in the U.S. capital.
“I think what matters more is the political backdrop here,” he said. “It’s the unpredictability of the president. He needs a win. He’s had a very unfavourable six months.”
Not surprisingly, the U.S. trade office picks up on some of Trump’s grievances in its outline of objectives for the NAFTA renegotiation. The document, released last month, sketches out a broad range of areas the U.S. administration wants to bargain, including dispensing with the dispute settlement mechanism.
Yet keeping some form of dispute resolution is important for both Canada and Mexico. Trudeau has said that a “fair” dispute resolution system is “essential.”
It’s critical for the Mexicans, too. “This is very important to us, to have a strong, transparent and efficient dispute settlement mechanism,” Perez Jacome said.
The written introduction to the U.S. trade objectives gives a telling sense of how the U.S. administration views the existing agreement. Since the deal took effect in 1994, the document says, “trade deficits have exploded, thousands of factories have closed, and millions of Americans have found themselves stranded.”
But similar concerns are being heard north of the border as unions and other stakeholders complain that free trade has led to the loss of manufacturing jobs in Canada, notably in the auto sector.
These groups say the coming negotiations are a chance to improve on a trade deal they argue failed to deliver promised improvements in wages, productivity.
“I agree that NAFTA has been a complete disaster,” said Jerry Dias, president of Unifor, Canada’s largest private sector union, which counts more than 23,000 autoworkers among its members.
Over the life of NAFTA, he said, assembly lines have closed in Canada and the U.S. while new plants have opened in Mexico.
“There has to be a timetable for a transformation of some of the auto work from Mexico back to Canada and the United States,” Dias said.
Similar sentiments are voiced by the Canadian Centre for Policy Alternatives, which thinks Canada could find common ground with the Trump administration in seeking measures to regain jobs that have gone overseas or Mexico.
“We share a hope with a lot of labour unions in Canada and the United States that we could remake NAFTA to make it more fair for workers in all three countries so that they are seeing more of the gains from trade,” said the centre’s Stuart Trew.
Yet the fact that Canada’s goals going into the talks have so far remained a mystery is unacceptable, says New Democrat MP and trade critic Tracey Ramsey.
Ramsey, a former 20-year autoworker, says the federal government should have formally laid out its objectives, just as the U.S. and Mexico have done.
“Liberals made a lot of promises to Canadians about progressive trade and it’s time to define what that is and show Canadians what they mean,” Ramsey said.