Canadian officials are convinced that the NAFTA agreement must be concluded

While negotiations on an updated North American trade pact continued to intensify this week in Washington, the highest Quebec delegate in New York said he was confident that the negotiations would result in a trilateral agreement.

"The team (USA) led by Wilbur Ross and Robert Lighthizer and Larry Kudlow is a very competent team. They know their job. They are not new children, said Jean-Claude Lauzon, delegate general of Quebec. . "You heard the president say" we want a good deal, we want a fair deal, and we want an agreement that will make America better and better … what is it? " try to do. And we do exactly the same thing. ""

Last month, Mexico and the United States reached an agreement in principle on a bilateral trade agreement largely aimed at bringing auto workers back to the United States. President Donald J. Trump said he would be willing to go ahead with the agreement with Mexico and get Canada out of the new North American Free Trade Agreement, this to what many organizations and industry leaders have strongly opposed.

"There is an unprecedented volume of goods between the three countries and a significant integration of operations, which makes it imperative a trilateral agreement," said the National Association of Manufacturers in a statement. "Such an agreement secures the jobs of our manufacturing workers and strengthens critical trade relations between the United States and Canada."

According to the International Trade Administration, Albany, Schenectady and Troy produced more than $ 4 billion worth of export products in 2016 and more than 51,000 New Yorkers were employed by Canadian-owned businesses.

ITA data also showed that at the national level, US jobs, supported by exports, have increased dramatically, from 1.2 million jobs in 2006 to 10% in the US. , 7 million in 2016.

"There were discussions, and you saw that in the media:" Well, there could be a free trade agreement with Mexico and Canada will be excluded, "said Lauzon." Well, what about Does this make a business model between the two largest trading partners in the world? "

According to a report published in 2016 by the big Canadian bank Desjardins, which details the trade between the United States and Quebec, New York imported more than 37% more goods from Quebec than the next nearest American state, Texas .

"Among the 50 US states, New York State is the one that weighs the most in the value of Quebec's exports," the report said.

The State of New York sends nearly 20% of its total exports to Canada, and New York's exports to Canada account for nearly 1% of all US exports, according to the US Census Bureau.

Uncertainty prevailed throughout the NAFTA bargaining process as Canadian officials made clear their commitment to two major dairy provisions and a dispute settlement mechanism. disputes.

Trump lamented the Canadian market for protected dairy products, whose import quota is set by the government, which maintains the stability of supply and market prices.

US dairy farmers are seeking access to the Canadian market, where dairy farmers are adamantly opposed to US producers launching products at lower prices, Lauzon said.

"Canada will certainly not make any major concessions on dairy products, Canada will not make major concessions on Chapter 19, absolutely not," Lauzon said. "And Prime Minister Trudeau said it the first day."

Chapter 19 refers to a provision of the original NAFTA agreement that allows countries to challenge tariff decisions from another country before a group of experts. This dispute settlement mechanism was designed to leave the decisions to an impartial arbitrator, rather than to the countries themselves.

Opponents of Chapter 19, however, claim that it undermines national sovereignty and weakens a country's ability to collect its own tariffs.

Both parties were reluctant to give in.

On the US side, Trump's fiery approach has resulted in a favorable deal with Mexico – which Lighthizer plans to do as he negotiates this week with Canadian Foreign Minister Chrystia Freeland.

Among the new provisions in the US-Mexico agreement is the requirement that automakers manufacture 75% of the total value of one automobile in North America, compared to 62.5% for the other. . In addition, 40 to 45 per cent of the vehicle must be manufactured by workers earning at least $ 16 an hour – a provision intended to directly benefit the United States and, apparently, Canada.

"If you look at a train that's currently running on the New York subway and is manufactured by Bombardier," said Lauzon, speaking of the Montreal-based transportation company, "you're going to have a very hard time defining yours. It is a Canadian product or an American product. "

After more than two decades of existence, business supply chains of the three NAFTA countries are linked, Lauzon said. This means that during manufacturing and assembly, a single product can cross national borders several times.

"Because of the nearly $ 700 billion of trade relations between our two countries, our economies are inextricably linked and our workers are dependent on a solid agreement that allows us all to grow and prosper," the statement said. .

President Trump has described NAFTA as "the worst trade deal of all time", because, he said, he sent jobs to southern Mexico, where companies were looking for labor. Cheap artwork. However, evidence suggests that automation is causing job losses recorded by the manufacturing and automotive sectors in recent decades and that companies in the sector almost unanimously supported the trade pact.

"Mrs. Freeland said," You know, there will be ups and downs, there will be fireworks. We will slam the door. We will be angry at each other, and at the end of the day we will find a solution, "said Lauzon.

US negotiators have set October 1 as the date for a new agreement before the new presidential administration of Andres Manuel Lopez Obrador takes power in Mexico and before Quebec holds elections for its national assembly.

Although the negotiations may extend beyond October 1, Mr. Lauzon said he did not see any upcoming elections.

"Quebec is free trade, it's part of our DNA," he said. "So whoever wins the election is a free-swinger.It's very very clear, so I see no problem there."

According to the NAM, Canada and Mexico remain the largest trading partners of the United States and in 2017 bought one-fifth of all US manufactured products, more than the other 10 US trading partners combined.

Lauzon never mentioned the name of Trump and cautiously suggested that Canadian negotiators were unaware of the purpose of the Trump administration with NAFTA discussions.

"Initially, we thought we were in a process of modernization with NAFTA," Lauzon said. "We are renegotiating NAFTA."

Trump, after the G7 summit in early June, described Trudeau as "very dishonest and weak" and ignited tensions between the two neighbors.

While the rest of the world, such as Europe, Asia, and South America are experiencing varying degrees of helplessness, Lauzon hopes that all political tensions in North America will diminish and that a landscape of less uncertain investments will come back.

"North America is one of two or three areas in the world that has predictability, stability and democracy and a society of law," Lauzon said. "It is therefore to your advantage as Americans and to our advantage as Canadians, to make sure we do not harm this reality."

"My personal hope," he said, "is that reason will win, ultimately."