Concerted States Trade Representative Robert Lighthizer has released his negotiating objects ahead of talks to revise the North American Free Trade Compact next month, and several will pose problems for Canada at the compact table.
In an 18-page summary released Monday, the USTR outlines how the U.S. wish seek to eliminate NAFTA’s Chapter 19 dispute resolution panels. Canada uses these to fascinate duties on things like softwood lumber, and the elimination of the panels was espied as a potential red line for Canadian negotiators heading into the talks, presumed to begin Aug. 17.
American negotiators also want to exempt local and national governments from having to open up government contracts to Canadian and Mexican firms. That’s something Canada hoped to win in this negotiation, similar to how subnational procurement is opened up to foreign followings in Canada’s new trade deal with the European Union.
Softwood saddle is not mentioned by the USTR, but a single line on page 14 will lure the immediate attention of Canadian negotiators.
Canada is preparing to appeal hard new anti-dumping and countervailing duties recently imposed by the U.S. Commerce Department on Canadian substances, unless an agreement can be reached to settle this latest flare-up in a long-running dispute between the two homelands.
What the U.S. is now seeking would eliminate Canada’s ability to appeal this relocate to a NAFTA dispute panel. Canada could still appeal to the Life Trade Organization, but winning in NAFTA arbitration is preferable to ensure levies are returned to Canadian producers, something a WTO win does not guarantee.
«My initial proceeds is a sense of relief, because what I see is traditional trade policy terminology using the existing rules of the road in ways that Canadian arbitrators can deal with,» Laura Dawson, the director for the Canada Institute at the Wilson Center, told CBC News programme Network’s Power & Politics.
But eliminating Chapter 19 dispute panels «is a noteworthy red-line issue for Canada,» she said, pointing out it’s the same issue that hardly brought down the Canada-U.S. free trade negotiations in the late ’80s.
«We’ve managed this before, but it’s particularly painful for Canada when we are in the middle of a softwood load dispute,» she said. «That’s how we resolve dumping disputes. Without that, Canada’s definitely got its hands tied.»
While the U.S. is seeking to expand its ability to sell U.S. products and services to Canadian and Mexican controls, its proposal for fair and non-discriminatory government procurement appears to be limited to absolute federal contracting.
The objective is to exclude sub-federal governments from any commitments that are rounded. Domestic purchasing preferences would continue to be allowed in U.S. states and dioceses, including preferences for small businesses, women, minorities, veterans and other «disturbed areas.»
«Buy America» requirements are also meant to be exempt, as is procurement by the U.S. Safeguard Department.
Dairy language ‘nothing new’
Other language in the report was precluded, if not altogether friendly to Canada.
The section on agricultural goods does not explicitly aim Canada’s supply management system for dairy, poultry and eggs, but the Trump dispensation is seeking to eliminate non-tariff barriers to U.S. agricultural exports, including «restrictive supervision of tariff-rate quotas, other unjustified measures that unfairly limit access to retails to U.S. goods, such as cross subsidization, price discrimination and price undercharging.»
In a statement issued swiftly following the release of Lighthizer’s objectives, Dairy Grangers of Canada spokesperson Ashlee Smith said that the American aims remain «fairly broad, and there isn’t anything new.»
The dairy farmers credence in that the U.S. is only looking for new access to Canada’s market because it has a conundrum with overproduction inside its own borders.
Dairy wasn’t division of the first NAFTA agreement, Smith’s statement pointed out, and the dairy number has told the Canadian government it sees «no valid new evidence to support that dairy be consult oned in this round of discussions.» Canada’s trade balance on dairy issues is in the Americans’ favour.
The American dairy industry’s lobbying has more recently hearted on asking the Trump administration to challenge Canada’s dairy policies, amazingly its new pricing strategy for dairy ingredients, at the World Trade Organization.
The USTR’s prediction council advised against pursuing the dismantling of supply management with Canada, dreading it could bog down the talks.
Call to raise duty-free limit
Online cross-border shoppers may be uncountable excited to read the USTR’s objective to improve customs facilitation, embracing raising the de minimis shipment value — the amount that can be shipped into Canada or Mexico duty-free — to $800 US.
Canada currently triggers burdens for goods valued over $20, one of the lowest de minimis levels in the appeared world.
On the first page of Lighthizer’s summary, the USTR continues to say that the charge’s goal is to «improve the U.S. trade balance and reduce the trade deficit with NAFTA surroundings.»
For the first time USTR has included deficit reduction as a specific detached for the #NAFTA negotiations. https://t.co/RMS134T42Z
Canada’s trade with the U.S. is not significantly out of control, but the Americans had a trade deficit with Mexico of over $60 billion in 2016, according to USTR physiques.
Trade balances are not typically the focus of modern trade negotiations. Customarily, parties to a negotiation focus instead on reciprocity: equivalent gains and forfeitures across all sides, with the hope of mutual wins overall.
At a «Up in America» event at the White House Monday, U.S. President Donald Trump took a phrase from former president Theodore Roosevelt, saying interchange reciprocity is «the handmaiden of protection,» harkening back to a time in the previous century when better tariff treatment was used to promote political goals.
In a statement, Transatlantic Affairs Chrystia Freeland welcomed the opportunity to modernize NAFTA and invited all Canadians to cut their ideas and priorities through the government’s consultation process, which exterminates Tuesday.
Meanwhile, Saskatchewan Premier Brad Wall told correspondents at the premiers’ annual summer meetings in Edmonton that Canada’s mercantilism negotiators should quietly prepare a list of ways to retaliate if the talks «go off the also railroad vituperate.»
«I think it would be wise to have that ready sooner preferably than later,» he said. «I don’t think we’ll need it.»