Foreign Affairs Minister Chrystia Freeland on Monday spelled out Canada’s major objectives in upcoming renegotiations on the North American Trade Agreement, signalling an intention to use the opportunity to make the 23-year-old trade pact “more progressive” by strengthening labour and environmental protections, and adding new chapters on gender and Indigenous rights.
Appearing before the House International Trade Committee, Ms. Freeland (University-Rosedale, Ont.) argued that negotiations to start this week on the continental trade deal could bring lucrative new opportunities for Canadians, namely a more modern deal better aligned with the Trudeau government’s progressive trade agenda.
“Those are some areas that we’re very excited about,” she told reporters Monday, following an hour-long appearance before the House International Trade Committee.
As the minister responsible for Canada’s trade relationship with the U.S., Ms. Freeland was invited to testify at the rare summertime committee meeting on the upcoming NAFTA renegotiations that get underway in Washington, D.C. on Aug. 16.
She used the opportunity to lay out the major goals for the federal government in the negotiations and to sell the Canadian public on the opportunities provided by reopening the deal.
According the minister, the six key objectives of the Canadian government in these trade talks are to:
“I am essentially optimistic going in to these negotiations. … We’re going to work very hard and we’re going to get a great deal for Canadians,” Ms. Freeland told the committee, adding that Canada will approach the talks with “goodwill” in an effort to improve upon the deal.
On the progressive aims, Ms. Freeland told reporters, following her testimony, that she envisions the gender chapter to be similar to the one International Trade Minister François-Philippe Champagne (Saint-Maurice-Champlain, Que.) negotiated into the Canada-Chile Free Trade Agreement, which was the first Canadian trade deal to include such a chapter.
“There is a really fruitful space for discussion,” said Ms. Freeland, citing the already developed Canada-United States Council for Advancement of Women Entrepreneurs and Business Leaders that Prime Minister Justin Trudeau (Papineau, Que.) and U.S. President Donald Trump formed earlier this year.
The minister credited the decision to pursue writing a new chapter on Indigenous rights to Assembly of First Nations National Chief Perry Bellegarde, a member of the council of mandarins convened to advise the minster during the NAFTA talks.
“That is another really fresh area for us to work on that is in keeping with Canadian values and the areas our government is pursuing,” she said.
The opposition Conservatives argued the objectives failed to provide any reassurances to the worried business community that the reworked deal wouldn’t hamper commerce.
“I’m hearing a lot of talk, we’re not hearing a lot of solutions, a lot of timelines. Businesses needs to know this isn’t going to be complicated. They need to know that they can continue to do business in the interim,” Conservative MP and trade critic Gerry Ritz (Battlefords-Lloydminster, Sask.) told reporters Monday.
Mr. Ritz also asked the minster at committee why the government wouldn’t first ratify the Trans-Pacific Partnership (TPP) agreement to use its enforceable protections as leverage in discussions on strengthening environmental and labour protections in the NAFTA pact.
Ms. Freeland said given the U.S. rejection of TPP, the government would instead use the Canada-European Union Comprehensive Economic and Trade Agreement as a template for practical protections to include in a reworked NAFTA.
Under the former Conservative government, Canada was one of 12 countries, including the U.S. and Mexico to sign the TPP in the fall of 2015. The Liberals pledged on the campaign trail to extensively study the deal before deciding whether to enact it. Once in office, the Liberals embarked on coast-to-coast consultations but gave up on deciding the fate of the pact once the Trump administration pulled the U.S. out of it earlier this year.
The Centre Block committee room was full for the Monday morning meeting, with both media benches packed, in addition to the rows of seats made available to the public, most of which were taken up by stakeholders and consultants taking notes as the minister spoke. Among the spectators was Mexico’s ambassador to Canada, Dionisio Pérez-Jácome.
Ms. Freeland was accompanied by senior trade officials at the meeting, who continued fielding questions from committee members after Ms. Freeland left. Sitting to her left during the meeting was Canada’s chief trade negotiator Steve Verheul, who has been previously described to The Hill Times as a well-prepared negotiator with a good poker face.
“All Canadians are truly fortunate that in these talks we will be represented by the best trade negotiators in the world. Canada’s trade negotiators are internationally renowned for their prowess,” said Ms. Freeland of the team working on these talks.
Committee chair and Liberal MP Mark Eyking (Sydney-Victoria, N.S.) thanked the minister for coming in over the summer, when it’s rare for House committees meet, saying it was a very important time for Canada.
Ms. Freeland responded that she has been impressed with level of support from all sides ahead of these negotiations and cited the committee’s commitment to a positive outcome in the talks. The committee has travelled to the U.S. to meet with American counterparts on various trade issues, and have been meeting on the “priorities of Canadian stakeholders having an interest in bilateral and trilateral trade in North America, between Canada, United States, and Mexico,” since May.
The new slate of continental talks stemmed from a campaign promise from U.S. President Donald Trump to negotiate a better NAFTA deal for the U.S. or withdraw from the agreement. It remains to be seen how much will be demanded from Canada.
Ms. Freeland said Monday that the federal governments preparations for a potential NAFTA renegotiation began last summer, before the American election, when she was international trade minister. At the time she asked Canadian officials to begin preparing NAFTA materials after seeing it becoming an issue in the presidential campaign.
To date, the Canadian government has made 185 visits to the U.S. and has spoken with 300 of what Ms. Freeland called “decision-makers,” as well as 200 members of Gongress, and 50 governors and lieutenant governors.
The Canadian government anticipates NAFTA talks to be completed in less than a year, largely as a result of political pressures in the U.S. and Mexico. Mexico’s general elections are to occur on July 1, 2018, and campaigns will be in full swing at this point for the U.S. midterm elections, scheduled for Nov. 6, 2018.
The Hill Times
Issues likely to come up in NAFTA talks:
Supply-managed agriculture: U.S. President Donald Trump has already singled out Canada’s dairy sector as an irritant. This and other supply-managed farming sectors, such as eggs and poultry, which are protected from export competition, are bound to come up.
Government procurement: President Trump has been trying to reduce the amount of U.S. government contracts going to foreign companies, including those from Canada. Canada, which does not impose such restrictions, will be seeking a more reciprocal arrangement with the U.S.
E-commerce: Canada has one of the lower value thresholds in the developed world, at $20, at which it applies taxes and duties on imported goods. The U.S. has identified this as a problem, and the Canadian government might score some points with domestic consumers by raising this threshold. But many Canadian retailers would not be happy with such a move.
Dispute resolution: The U.S. would like to abolish Chapter 19 of NAFTA, which establishes bi-national panels to resolve disputes. Prime Minister Justin Trudeau has said “a fair dispute resolution system is essential.”
Softwood lumber: The trade of softwood lumber is regulated by an agreement separate from NAFTA, but it’s hard to imagine Canadian officials not seeking some relief during these talks on tariffs totalling about 27 per cent that have been applied by the U.S. on Canadian softwood lumber since President Trump took office.
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