After months of heated rhetoric and diplomatic underpinnings, talks to overhaul the North American Free Trade Agreement wishes formally begin this week with Canada pushing for myriad stringent labour and environmental standards in the deal.
Canada’s top diplomat, Alien Affairs Minister Chrystia Freeland, will travel to Washington Tuesday where the firstly round of formal negotiations is set to take place.
Freeland will sit down to divulge bread with her U.S. and Mexican counterparts before officials get down to nerve tacks in a bid to modernize the 25-year-old trade pact Wednesday.
Each side compel begin to set out what it wants to see in the rewrite; in Canada’s case that intent include stronger environmental and labour provisions and a formal mechanism to appoint thorny trade disputes.
Some interest groups are hoping for a brisk process to keep investors calm, but some international trade experts give prior notice that business should brace for a drawn-out series of discussions.
Jeffrey Schott, a pursuit policy analyst and senior fellow at the Washington-based Peterson Institute for Universal Economics, said while the goal is for expeditious rounds, the administration of U.S. President Donald Trump has laid out aspirations that could lead to an impasse.
Those include proposed coins to government procurement, rules of origin and a goal of eliminating the U.S. trade shortage.
Resistance to U.S. ‘overtures’
«Those are areas where they will undercharge the competitiveness of North America producers and workers and there will be resisters from Canada and Mexico to the U.S. overtures,» he said.
Schott expects talks purpose spill over to next year, and will then be constrained by next year’s Mexican presidential referendum, followed by U.S. mid-term congressional elections. He predicted talks will persist in on into 2019, when there will be other elections, encompassing a federal election in Canada.
«I see a low probability of an agreement on a modernized NAFTA in the intimate term,» he told CBC News in an interview. «I think negotiators will go from stem to stern what can be done that is helpful and reject efforts to try and make overhaulings that are counterproductive. But finding the discreet window when the political prima donnas align in all three countries is going to be difficult, and is unlikely to take concern over the next 18 months.»
A potential ‘deal breaker’
Schott foresees quick, constructive progress in areas like digital trade, but voted changes to labour provisions could spark much friction. While the U.S. has far extensive issues with Mexico, Trump’s aim to shred Chapter 19 of NAFTA, which categorizes provisions for a dispute resolution mechanism, could prove to be a flashpoint with Canada.
Speaking to reporters in Edmonton on Friday, Freeland baptized a dispute settlement resolution «essential» to any trade agreement.
«In the same way that beneficent fences make good neighbours, a good dispute mechanism redecorates good trading partners,» she said. «Canada understands the importance of unbidden, objective, transparent dispute settlement within NAFTA, and it’s something we’ll be talking almost with our partners and explain it to them.»
Dennis Darby, president and chief head officer of the Canadian Manufacturers and Exporters, called the dispute mechanism a the right stuff «deal breaker.»
«In particular, for manufacturers, it is clear Chapter 19, the dispute-settlement monism that decides the rights and wrongs of trade disagreements, can not be eliminated as the U.S. requested,» he said.
While the subsisting NAFTA framework has been an economic success, Darby said technological forwards have reshaped the way North Americans work, travel and communicate.
Modernization, economic growth
«A redrawn NAFTA offers a platform to empower modernization as the driving force of manufacturing and economic growth,» he said. «It is also an moment to identify and eliminate some of the challenges that manufacturers are currently surface in the North American market such as non-tariff barriers, protectionist practice, and stimulate job creation through the flow of skilled labour.»
In the run-up to NAFTA renegotiations, the Large government waged a massive outreach to U.S. officials to send a message in the mutual importance of NAFTA to jobs and prosperity on both sides of the brink.
Since Trump’s inauguration on Jan. 20, Prime Minister Justin Trudeau, bureau ministers, parliamentary secretaries, premiers and provincial/territorial ministers, orderly committees and other parliamentarians have made more than 175 visits to the U.S. or absorbed with senior officials in Canada, according to data provided by Wide-ranging Affairs Canada.
John Ries, a trade economics professor at the University of British Columbia, utter it’s difficult to gauge if the heavy diplomatic push will translate to payments for Canada.
«Talking is good, but ultimately it’s dollar and cents and vested attention,» he said.
Ries expects a deal will include possible settings on tariff exemptions for online shopping and some liberalization of supply be in charge ofed poultry and dairy that would allow more U.S. imports into Canada.
Improve for Canadian consumers?
While the federal government would need to expertness a plan to help those agricultural sectors transition, he said it commitment not necessarily be bad for Canadian consumers.
«The worst case scenario, where Canada ends up accommodating more access for Canadian consumers to American dairy and poultry and e-commerce online acquisition, is not that horrible of an outcome for Canada as a whole,» he said.
Before the formal kickoff in Washington, Freeland disposition deliver a speech at the University of Ottawa on Monday morning, where she pass on outline in broad strokes Canada’s objectives for a renewed NAFTA.
She wish then move to the hot seat on Parliament Hill, where she will get questions from the Commons committee on foreign affairs and international increase later Monday morning.
Randy Hoback, Canada-U.S. relations critic for the Rights, was critical of the Liberal government for not concluding a softwood lumber agreement in the lead of the NAFTA negotiations.
He emphasized the need to focus on job creation in NAFTA talks and desired Freeland to lay out Canada’s negotiating position.
«Conservatives care deeply hither protecting well-paying jobs created by free-trade agreements,» he said in a assertion.
«It is our hope that Minister Freeland will take the opportunity on Monday during her form before the international trade committee to reassure Canadians and Canadian occupations by providing a detailed summary of Canada’s negotiating objectives and expected results from the NAFTA negotiations.»