WASHINGTON—Foreign Affairs Minister Chrystia Freeland released Canada’s list of key demands for a new North American Free Trade Agreement as talks get set to begin in Washington Aug. 16.
“In all these discussions, we will come to the table with goodwill, and Canada’s characteristic ability and willingness to seek compromise and find win-win solutions,” she said.
Freeland is also calling for new “progressive” elements in NAFTA 2.0: stronger labour standards, tougher environmental protection provisions as well as chapters on gender and Indigenous rights.
On that front, Canadian negotiators plan to use Canada’s recently negotiated trade agreement with the European Union as a reference, Freeland said.
“Progressive elements are also important if you want a free-trade deal that’s also a fair-trade deal,” Freeland said in a question-and-answer session following the speech at University of Ottawa.
Ottawa also aims to cut down on bureaucracy, harmonize regulations to ease the flow of cross-border business, push for more mobility for professionals and free up the market for government procurement, she told her audience.
Canada’s positions will also include work to maintain key elements of the 23-year-old deal, including the process to ensure anti-dumping and countervailing duties are only applied when truly warranted.
Last month, U.S. Trade Representative Robert Lighthizer released the Trump administration’s set of priorities for the NAFTA talks.
Freeland warned that Canadians should brace for some tense exchanges during the NAFTA talks, in general.
“I think we all do need to be prepared for some moments of drama,” she said. “We should just see that as an expected part of any trade negotiations.”
Freeland’s NAFTA wish list, which is much shorter than the U.S. list of more than 100 items, includes:
- A new chapter on labour standards. The original NAFTA included a labour section as an addendum, inserted into the agreement after Bill Clinton was elected and insisted on a few changes. Some officials in Canada and the U.S. have identified a goal of tougher labour rules: Increasing Mexican wages, to make auto plants in the other countries more affordable.
- A new chapter on environmental standards. This was also added as an afterthought to the original NAFTA, placed there after Clinton’s election. Freeland says she wants a chapter that ensures no country can weaken environmental protection to attract investment. She also says it should support efforts against climate change.
- A new chapter on gender rights.
- A new chapter on Indigenous rights.
- Reforms to the investor-state dispute settlement process. Specifically, Freeland referred to Chapter 11—which involves companies suing governments. She said she wants reforms so that “governments have an unassailable right to regulate in the public interest.” This is not to be confused with Chapter 19, which regulates disputes between companies over dumping, in cases like softwood lumber, and which the U.S. administration might seek to eliminate.
- Expand procurement. For years, Canada has wanted to kill Buy American rules for construction projects at the state and local level. It could be a tough sell. U.S. lawmakers are demanding even more Buy American rules, which is something President Donald Trump campaigned on. Freeland said: “Local-content provisions for major government contracts are political junk food: superficially appetizing, but unhealthy in the long run.”
- Freer movement of professionals. NAFTA includes a list of professions where people can easily get a visa to work across the border. It’s an old list—it mentions land surveyors and range conservationists, but not computer programmers. International companies want this list expanded to make it easier for employees to move between offices.
- Protect Canada’s supply-management system for dairy and poultry. Canada does not have free trade in these areas, and regulates imports and prices.
- Protect cultural exemptions. Canada insisted on protections in the old agreement for cultural industries, like publishing and broadcasting. The U.S.’s annual report on international trade barriers lists this as an irritant.
- Maintaining a process to regulate anti-dumping and countervailing disputes, like the one over softwood lumber. Freeland noted that Canada briefly walked out of the original talks in 1987, as this was a deal-breaker. The U.S. says it now wants to get rid of the resulting Chapter 19. Some observers say it might simply be modified.