OTTAWA—The chief U.S. negotiator rejected suggestions that the Americans are deliberately dragging their feet in talks to rewrite the North American Free Trade Agreement—and he got backup from Canada’s lead minister on the file, Chrystia Freeland.
John Melle said he sees no issue with the pace of the talks, in their third round this week in Ottawa, even though the U.S. has yet to table detailed proposals on any of the most contentious issues.
The failure by the United States to lay all its cards on the table has prompted many trade experts and stakeholders to predict there is no way the three countries can strike a deal by the end of the year, as the Americans want. Some have gone so far as to say the slow-motion reveal of key American demands suggests the U.S. is not serious about wanting a deal.
But Foreign Affairs Minister Chrystia Freeland came to the United States’ defence, saying it’s “standard practice” in trade negotiations and “just common sense” to begin with the easiest issues on which there is substantial agreement, leaving the more difficult ones until closer to the end of the talks.
“The approach that all three countries have been taking is to look for areas where we have the most common ground, to look to consolidate, to stabilize the text there and then, having gotten to the base camp of the negotiations, then to tackle the more difficult ascents,” she said.
Freeland added that the talks have already produced “solid progress” on “bread and butter trade issues.”
“These might not be the most sexy issues but they are the issues that really matter to Canadian business people, things like electronic forms, like automatic declarations of origin, like harmonizing regulation … This is going to make the lives of Canadian business people a lot easier.”
Freeland acknowledged that the U.S. has not yet tabled detailed proposals on some of the most contentious areas but stressed that negotiators are nevertheless “right now working on all areas of the negotiation.”
Melle too said the negotiations are “moving across the board—very ambitious.” And he cited U.S. Trade Representative Robert Lighthizer to describe the breakneck pace of the talks.
“We’re working, as my boss said, at ‘warp speed.’ I think that’s accurate.”
The talks are proceeding at an accelerated pace in a bid to reach a deal by year-end, with only a couple of weeks between negotiating rounds. The U.S. and Mexico want a quick deal to prevent NAFTA from becoming a political football in the run-up to next fall’s mid-term congressional elections and Mexico’s general election in July.
However, Freeland would not commit to meeting the year-end deadline.
Canada understands the “political constraints” faced by its NAFTA partners and recognizes that “political uncertainty isn’t good for the economy of any of the NAFTA countries,” she said. Hence, Canada is “very much interested in concluding this as quickly as is humanly possible.”
“Having said that, as I said before, what Canada wants and what all the countries want is a good deal, not just any deal. Let’s do this as fast as we can, bearing in mind that is a very ambitious modernization effort that we’re engaged in.”
Prime Minister Justin Trudeau also shrugged off concerns about the pace of negotiations.
“Canada is always there, has done its homework, we have concrete proposals on the table and we’re very pleased to have a chance to discuss them with our counterparts from the other countries,” he said at an event in Toronto.
On Sunday, Canada’s chief negotiator, Steve Verheul, said he doesn’t expect to see any details from the U.S. on its desire to end Canada’s supply management system for dairy and poultry during the third round of talks. Nor does he expect to see detailed American proposals on two other hot topics—the investor state dispute settlement process and the U.S. demand for “substantial” American content in North American-manufactured automobiles.
The U.S. has also not gone into detail so far on its demand to scrap the independent dispute settlement mechanism, which Canada calls essential.
Earlier Monday, Agriculture Minister Lawrence MacAulay had sought to reassure the dairy sector by saying Canada will protect supply management as it modernizes NAFTA.
MacAulay met representatives from the agricultural industry—including wine, dairy, pork and beef—during the third round of talks with the U.S. and Mexico to replace the 23-year-old trade deal.
The minister said his defence of the system that protects Canadian dairy, eggs and poultry does not mean there is nothing about the trade deal that needs changing.
“The U.S. realizes we are their friends, but there’s things to iron out and hopefully it will iron out in a very positive way and even make the deal better.”
The dairy sector was excluded from the original NAFTA deal in 1994, but the supply management system, which limits the amount of dairy that can be imported into Canada without high tariffs, has long been a point of contention.