White House Outlines Objectives For NAFTA Talks

Posted July 20, 2017

To trade lawyers, they were fighting words.

By previous year, the United States ran a $64 billion trade deficit with Mexico and a almost $11 billion gap with Canada. Effective dispute settlement helps to stop trade disagreements from escalating.

Four MPs from both parties sent a joint letter Tuesday to the clerk of the Commons global trade committee, requesting that an emergency meeting be held to grill three cabinet ministers on Canada's negotiating objectives and "expected positive outcomes" of the renegotiation, which is to begin in mid-August.

A more recent dairy-related issue that also came up was a deal reached by the 12,000 dairy producers in Canada to sell milk proteins to domestic processors at a discount in order to further protect the industry from imports of cheap USA milk ingredients.

"The document is quite vague so while negotiations can start in 30 days, it's unclear what will be demanded on key issues, whether improvements for working people could be in the offing or whether the worst aspects of the TPP will be added making NAFTA yet more damaging for working people", she concluded. However, a spokeswoman told Inside U.S. Trade that "subsequent rounds have not been confirmed by all countries at this time". But Chapter 19 allows a foreign country, like Canada, to appeal this decision before a panel made up of officials from both countries. He is now the assistant trade representative responsible for USA trade policy in the Western hemisphere. NAFTA isn't ideal, but it has been very beneficial for the majority of US agricultural products and the farmers who grow them. In 1993, Canada won a victory on this panel that reversed a decision by the US trade court to impose duties on lumber. That threat has kept fears elevated about the potential for a trade war with Canada and Mexico, America's second and third top trade partners, respectively. "It's part of the agreement". But under the terms of NAFTA, Canada and Mexico are always excluded from those penalties. This is something China has done in the past, but it isn't now a problem in North America. For example, if Canada closes its doors to U.S. dairy products, might the United States return to dairy export subsidies to help its dairy industry?

"The USTR seems to be backing the same priorities that have guided trade agreements since NAFTA was first negotiated, promoting corporate interests and leaving workers behind", Gerard said.

The Trump administration notified Congress in May of plans to renegotiate the regional trade deal. "There's nothing in there where you could say, this is how we get rid of the trade deficit". Farmers and ranchers have encountered market access issues with Canada as well. This provision in the NAFTA goals would do away with the protections Canada is still able to maintain on the market, opening it up to American competition.

Hoback said the government could at least identify "what are the do-not-touch items".

A well-placed Canadian source familiar with discussions said the United States had proposed the schedule, but could not confirm whether an agreement had been reached on the timetable. Regardless, the Canadian dairy industry is likely to fight fiercely against them. The side agreements' enforcement mechanisms are virtually toothless.

Mexico, Canada and the United States agreed generally to these principles before, as part of the TPP, a deal that Trump officially withdrew from on his first Monday in office.

Congress is now giving its feedback to negotiating objectives published by Lighthizer's office Monday, as also required by law. It's not clear whether Mexico, which has the most work to do to meet these requirements, will oppose them now that they are receiving less in return.