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The United States and Canada will resume their efforts on Wednesday to resolve issues that are delaying the renegotiation of the North American Free Trade Agreement.
Canadian Foreign Minister Chrystia Freeland is scheduled to meet with US Trade Representative Robert Lighthizer in Washington after the United States and Mexico agreed last week on the Trilateral Agreement. The focus this week will be on relations between Ottawa and Washington to keep the three signatory countries on a 25-year treaty update.
President Trump, who has long regarded the Nafta treaty as a "disaster", reiterated during the Labor Day weekend that if the US and Canada can not reach an agreement, his administration could conclude an agreement excluding Canada. He also warned Congress not to intervene.
Canadian Prime Minister Justin Trudeau said Monday that his bargaining team is ready to work on an agreement that benefits all parties. "There are a number of things that we absolutely must see in a renegotiated NAFTA," he said at a media event in the suburbs of Vancouver, BC. "Nafta is better than a bad Nafta deal for Canadians, and that's what we'll stay with."
The White House has officially informed Congress of its intention to sign a new version of Nafta this fall with Mexico, saying Canada was free to join him, if he wanted to. The US administration should begin the process of withdrawal from the old treaty. while preparing the ratification by the Congress of the new.
The new schedule does not allow for an agreement allowing Canada to join. After the two parties failed to reach an agreement last week, people familiar with the process said the new deadline could be extended until September 30th. pact that he could sign before November 30, when the leader of Mexico will leave office.
"We have agreed something that Canadians should sign up to, so we are very confident that the talks will be going well this week and that we will soon have Canada on board," said Kevin Hassett. , President of the Council of Economic Advisers of the White House, on Fox Business Network.
Many US lawmakers, business groups, and union leaders have insisted that Canada continue to be part of a tripartite agreement that allows duty-free trade to fuel the North American auto industry and other sectors. Mexico has also expressed its preference for the continuation of Canada, but has indicated its willingness to go ahead without it.
The stakes are high because the Trump administration has sought to exert maximum pressure on its closest neighbors, even imposing steel and aluminum tariffs in Canada and Mexico for reasons national security.
As talks with Canada resume, the biggest sticking point is Canada's insistence on maintaining a dispute settlement system that allows member states to challenge trade sanctions imposed by others. Mr. Lighthizer proposed to eliminate the system, contained in chapter 19 of Nafta, and Mexico accepted it. But Canada still does not want to remove the mechanism.
"We can all understand that the assurance that everyone is fair in the Nafta agreement is important," said Trudeau. "We need a dispute settlement mechanism such as Chapter 19 and we will stick to it."
Trump administration officials complained that the dispute settlement process undermined US sovereignty, claiming that the independent panels to adjudicate these cases had been primarily used to override the duties imposed. by the United States Department of Commerce.
The United States and Canada remain far apart on other contentious issues.
Canada has told arts groups that it will fight against attempts by US officials to dilute a cultural exemption currently in force in Nafta to protect the music, television and film sectors. The exemption is intended to ensure the distribution of productions made in Canada. It is considered crucial for the francophone province of Quebec – a region rich in votes and a majority Anglophone minority in North America – and in media center cities such as Toronto and Vancouver, on which the ruling liberals count for their support .
"The cultural exemption must be maintained," said Trudeau. "It would be giving up our sovereignty and our identity."
Other issues that the United States and Canada disagree with include increased US access to the Canadian dairy market; intellectual property; and duty-free small quantities of goods purchased in the United States. On top of that, the United States and Canada have yet to address the fate of US tariffs on Canadian steel and aluminum, which has resulted in retaliation from Ottawa.
"Canadians do not make easy trade-offs – they are big political issues in Canada, especially in the dairy sector," said William Reinsch, a former US official at Washington's think tank Center for Strategic and International Studies. "It must be tempting to give [Mr. Trump] a giant major and do not get out of it.
The two countries made progress in the negotiations last week, with Nafta's sections on the environment and the workforce nearing completion, two people close to the talks said.
Businesses and groups of workers are anxiously watching what happens next. The Dairy Farmers of Canada, an industry lobby, said their members were unwilling to eliminate production quotas and tariffs aimed at thwarting foreign competition. The group says the industry is already on the verge of losing about $ 250 million in sales due to Canada's dairy concessions to conclude trade agreements with the European Union and the countries of the region. Pacific.
Write to Paul Vieira at [email protected] and William Mauldin at [email protected]
