WASHINGTON—Wondering what the Americans might want from Canada in a renegotiation of the North American Free Trade Agreement? Multiple clues might be embedded in a document published by the U.S. government.
The U.S. publishes an annual list of complaints about trade practices in other countries.
This list was cited in a policy paper written for the Trump campaign by Wilbur Ross and Peter Navarro—both of whom now have senior administration roles.
Ross is the incoming commerce secretary and Navarro is President Donald Trump’s top trade adviser. When Trump announced this week that negotiations will start soon, Ross was seated next to him.
In their paper, Ross and Navarro complained about trade deals like NAFTA and China’s entry into the World Trade Organization being poorly negotiated. They cited, as evidence, the findings of the annual report.
“One need look no further than the lengthy list of transgressions detailed in the National Trade Estimate for examples,” said the September paper.
Several trade experts interviewed by The Canadian Press agreed that the list will form the backbone of the U.S. negotiating position: “That’s the starting point right there,” said Gary Hufbauer of Washington’s Peterson Institute for International Economics.
“That’s the laundry list.”
The Canadian government has been clear about some of what it wants in upcoming trade negotiations: greater certainty on softwood lumber, more access to U.S. public construction projects, and upgraded worker-mobility rights.
The Trump team, however, has said little about Canada.
One likely American priority involves car parts, several NAFTA experts predict. They expect the U.S. to seek increases in North American content requirements, which could attract some production here from Asia.
Yet the devil is in the details, said a former Canadian government official who worked on negotiations for the 2009 auto bailout. Will the U.S. hit its neighbours with a specific quota for American content? Will the changes drive up car prices?
“It’s all in the way you write the rules,” said Eric Miller, who now runs a consulting firm, Rideau Potomac Strategy Group.
One thing that he, Hufbauer, and Dentons trade lawyer Alan Wolff, who worked on numerous steel cases with incoming U.S. Trade Representative Robert Lighthizer, all agree on is that the National Trade Estimate’s annual report on foreign barriers is a valuable guide post.
The U.S. begins its trade negotiations by consulting American companies, seeking their input. And that’s what this document is—input from U.S. companies on unwelcome trade practices from other countries. Its 2016 edition has eight pages on Canada.
Here’s what it says:
Wolff predicts many issues will wind up on the negotiating table.
While Canada has suggested its preference would be a small, targeted renegotiation of NAFTA, Wolff, a onetime senior U.S. trade negotiator, said that the rule of thumb in important negotiations is that topics get added over time.
Some may not even involve Canada.
Some U.S. requests might be aimed at enshrining principles for future trade deals. Wolff cited currency manipulation as one example, as well as the rules on state-owned enterprises in the ill-fated Trans-Pacific Partnership, which were aimed at Vietnam in the short term, with a longer-term eye on future deals with China.
“Once you get into negotiations it tends to broaden, not narrow,” Wolff said.
He made one more prediction—that Canadians would like many of the changes: “The net result is likely to be far more positive for Canada-U.S. relations than it is currently. Because it’s a chance to improve things.”