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Behind the scenes of how Canada’s ‘dream team’ negotiates NAFTA

Chief negotiator Steve Verheul, and Canada's top two officials in Washington, David MacNaughton and Kirsten Hillman, are among the dozens involved in the sensitive trade talks, which see negotiators holed up in a different North American capital's hotel board rooms every few weeks to hash out the text.

Mexico's Economy Secretary Ildefonso Guajardo, Canada's Minister of Foreign Affairs Chrystia Freeland, and U.S. Trade Representative Robert Lighthizer exit a press briefing during the third round of negotiations to rework NAFTA.The Hill Times photograph by Andrew Meade

PUBLISHED :Wednesday, Oct. 18, 2017 12:00 AM

Every few weeks this fall, roughly 300 Canadians, Americans, and Mexicans descend on a hotel in one of their respective capitals for about five days. While lobbyists chat in the hotel coffee shop or restaurant and reporters troll for tidbits of news, trade negotiators are holed up in hotel board rooms, sometimes 20 to a room, hashing out how to rework the North American Free Trade Agreement, at times until the wee hours of the morning.

The hundreds of Canadians working on the highly secretive NAFTA renegotiation operate largely behind the scenes and work on a need-to-know basis, but the talks nevertheless follow a formula familiar to the experienced team, say trade experts.

“There’s a considerable effort to keep things fairly quiet in public,” said Queen’s University professor emeritus Robert Wolfe, adding the relatively few leaks to media on Canadian strategy is no mistake.

Representatives of businesses and other groups getting updates or serving in advisory roles have signed non-disclosure agreements.

  

The negotiations, ongoing since August, involve 28 “tables” or negotiating rooms, each hashing out what will likely become a chapter in the final deal’s text.

These NAFTA talks are different from past trade talks in that the time between rounds is only a few weeks, whereas in other talks it might be months. Also, the politicians leading the talks from the three countries fly in for the end of each round, typically dining with each other, sitting down for formal meetings, and approving a joint communiqué on what was accomplished.

During the latest round, the fourth, in a Washington-area hotel, negotiators seemed to have finished the low-hanging fruit where the three countries could easily agree, and moved on to stickier subjects. “Substantially all” initial text proposals have been tabled, according to the three sides’ joint communiqué at the end of the round.

Canada, the United States, and Mexico have touted progress after effectively closing chapters on small- and medium-sized enterprises and competition, but tensions grew in the fourth round, which ended Oct. 17, as American negotiators were accused of pushing non-starters and United States President Donald Trump mused again about pulling out of the deal if his country doesn’t get what it wants.

  

After the breakneck speed of initial negotiations, there will now be more time in between, the communiqué said, with Mexico set to host the fifth round of talks in Mexico City from Nov. 17-21. More negotiating rounds will be scheduled through the first quarter of 2018.

Based on past practice, like with the Trans-Pacific Partnership trade deal, there wouldn’t be many Canadians involved who know very much of the big-picture details, and Mr. Wolfe’s sense is with NAFTA even less are in the loop.

“They are being very careful. They really do not want to negotiate in public, they really do not want something being said in Ottawa that could cause a firestorm in the White House because there’s a completely unpredictable negotiating environment.”

It’s a necessity born of the alchemy of several factors: a tight timeline ahead of 2018 elections in Mexico and U.S., the intensity of interest in Canada, and the volatile situation under Mr. Trump and his America-first rhetoric.

  

 

The tables

The chief negotiators’ table seems to meet all the time during a round, observers noted, made up of John Melle of the United States, Kenneth Smith of Mexico, and Canada’s Steve Verheul. They also would have met early on to determine the topics each table would focus on—which are likely to become the chapters of the deal’s text.

Canada’s chief NAFTA negotiator Steve Verheul, pictured in Brussels in 2015, meets with his Mexican and U.S. counterparts to discuss contentious issues while overseeing the work of the heads at the 28 NAFTA negotiating tables. Photograph courtesy of the European Union

Each table, or negotiating room, works with the text in their chapter alone, while the chief negotiators carry with them the full text and will cover the contentious issues. They usually meet at the beginning and end of the day to debrief with their table leads and funnel key information up to the political leads, in Canada’s case Foreign Affairs Minister Chrystia Freeland (University-Rosedale, Ont.). Sometimes a chief negotiator might interrupt a head of one table if their discussion becomes relevant, but “they try and do it in tandem so they’re not upsetting the process,” said former Canadian diplomat Colin Robertson.

Last week, U.S. Commerce Secretary Wilbur Ross circulated a list of 28 topics not previously made public. Global Affairs Canada did not respond to confirm if the list was accurate, after some observers noted oddities, namely the lumping of trade remedies in with dispute settlement and a “securities annex,” which sources told Inside U.S. Trade was not a topic being covered in the talks or something the three countries were looking to include in a new deal.

Other topics included agriculture, customs, energy, environment, digital trade, intellectual property, labour, rules of origin, and technical barriers to trade. While there is a table on gender, which Canada said was a priority, a chapter dedicated to Indigenous people was absent. That’s likely still being handled at the chief negotiators’ table, said Mr. Wolfe.

As much as Canada may publicly push for the above goals and environmental standards, the reality is defensive issues are taking the top spot, said Ottawa-based trade strategist Peter Clark. Hotly contested issues are rules of origin, the review of Chapter 19’s dispute settlement, and supply management, which came into the crosshairs this week as the U.S. demanded its end, according to media reports.

Most of the tables are working from a single unified text, with sections in square brackets highlighting separate language where the sides disagree. A particular clause could have three different versions, or perhaps two, if only one is the odd country out on language agreement. The tables work off that piece of paper until they reach consensus, or one single text they all agree on.

Often the Canadian chapter heads managing each table would be from Global Affairs Canada, but also from the government department responsible for the area. That’s the case with Canada’s chief agriculture negotiator Frédéric Seppey, who observers note is in a uniquely—and historically—public position given the complexity of the highly technical file. Other negotiator names are not public and Global Affairs did not respond to a request for that list.

Other than the heads and their supporting staff, the hundred or so Canadians in Arlington, Va. supporting the negotiations this week didn’t divide into sectors. There are legal staff, regional and provincial experts, including those from the respective department or the embassy in Washington.

“They’re the resource people. They’re to help you from falling into [an] abyss,” Mr. Clark said, adding Canada’s Ambassador to the United States David MacNaughton—the country’s quarterback when it comes to Congress—has a big team working for him, including his No. 2 Kirsten Hillman, deputy head of mission, who used to be Canada’s chief negotiator for the TPP.

David MacNaughton,
Canada’s ambassador to the United States, is a key part of communicating Canada’s trade interests to Congress, insiders say. Photograph courtesy of New America

“They’re aware where all of the bodies are buried, where Canada has leverage, which states are big suppliers to Canada. He puts it all together,” said Mr. Clark, referring to Mr. McNaughton. He was speaking last week from Washington where he said the sides were going in the rooms to negotiate late in the evening, often with at least half a dozen people from each country. By Sunday, he noted the pace of the meetings had slowed.

In an interview last month, Rideau Potomac Strategy Group president Eric Miller, a former vice-president with the Canadian Council of Chief Executives, called them the “dream team.” Ms. Hillman has the technical knowledge from her years working in trade, including on the TPP, and Mr. MacNaughton, while not a deep trade expert, has the “complete trust” of Prime Minister Justin Trudeau (Papineau, Que.).

Both Mr. Wolfe and Mr. Robertson sit on a trade-experts council that acts as an advisory sounding board to the deputy minister of trade, who briefs the group periodically and seeks their views. There are also a number of advisory groups from various business sectors, Mr. Robertson added. Those groups likely have their own lawyers looking at the language of the deal and aware of the sensitivities.

“That’s why these things run over three or four days, because you are constantly checking back to verify,” Mr. Robertson said.

As much as the action is where the negotiating teams meet, there’s also that chain of check-ins and a fairly complex behind-the-scenes process in Ottawa to develop negotiating objectives and to ensure there is broad support within the government, Mr. Wolfe added.

Hotels make a good space for these sorts of negotiations, said Mr. Robertson, explaining in his experience how they would reorganize tables to fit in a big square or triangle to fit the three sides. Principal negotiators for each country would be in the front row, with those in supporting roles behind.

In this round, Mr. Clark said the board rooms can hold around 20 people.

“Each table will have its own dynamic and it is a reflection in part of the personalities at the table,” said Mr. Robertson, but what’s different here is that the players know each other quite well, many of whom would have been at the table for TPP.

“The rhythm depends on what it is you’re negotiating,” he added.

swallen@hilltimes.com

The Hill Times