I have a little list

So, Andrew Coyne, writing in the National Post, asks if the Liberals really expect the USA to add e.g. climate change or indigenous rights to NAFTA or, he wonders, are they setting up the talks to fail? Let’s look, with thanks to the Financial Post, at Canada’s ten demands:

  1. 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 Mexico have identified a goal of tougher labour rules: Increasing Mexican wages, to make auto plants in the other countries more affordable.
  2. maxresdefaultA 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.
  3. A new chapter on gender rights.
  4. A new chapter on Indigenous rights.
  5. 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.
  6. 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.”
  7. 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.
  8. Protect Canada’s supply-management system for dairy and poultry. Canada does not have free trade in these areas, and regulates imports and prices.
  9. Protect cultural exemptions. Canada insisted on protections for cultural industries, like publishing and broadcasting. The U.S.’s annual report on international trade barriers lists this as an irritant.
  10. 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.

In my opinion, items 2, 3 and 4 are 100% political ~ they are the Liberal Party’s opening salvo in the Liberal’s 2019 election campaign. These are not things the professionals in the Foreign download (1)downloadAffairs or the Industry departments would have added; they come from the desks of Katie Telford and Gerald Butts and no one, including Minister Freeland really cares much about them, and they will fail, but not until “Team Canada Trudeau” has been seen to have given ti the “old college try.” Items 8 and 9, I think, are losers that we are willing to trade away for the things that really matter to us: items 1, 6, 7 and 10. Minister Freeland is not trying to lose and, in fact, I suspect she will fight hard and very, very publicly for items 2, 3 and 4 because the negotiations will last, I believe, well into 2018, possibly even past the US mid-term elections and, therefore, into 2019 because Canada will want to stretch them out for as long as possible before “surrendering” on everything except items 1, 6, 7 and 10.

I think that a short list (the US has a very loooooooong one) is probably a good negotiating tactic.  I suspect that the US hoped for a set of (largely) parallel (and therefore (relatively) speedy) negotiations between mid ranked officials with only a few requiring the attention of the US Trade Representative, himself. Canada has, I’m pretty sure, an official for every item on the US’ list but the Canadians will, likely, want to make everything on IKVKvcMYPeter-Navarro-White-House-National-Trade-Council-1024x536their short list a top level issue, requiring the Assistant US Trade Representative, John Melle, to deal with each, face-to-face, with Canada’s Steve Verheul and, eventually, likely pitting Trump’s trade guru Peter Navarro against Minister Freeland and, quite possibly, Trump against Trudeau.

 

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