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‘Important progress’ at NAFTA talks, ministers say

‘Important progress’ at NAFTA talks, ministers say

Canada, the U.S. and Mexico put a positive spin Tuesday on what sources say was a tough five-day round of negotiations to rewrite North American free trade rules.

By TONDA MACCHARLES – Ottawa Bureau reporter
Tues., Sept. 5, 2017

OTTAWA—Canada, the U.S. and Mexico put a positive spin Tuesday on what sources say was a tough five-day round of negotiations to rewrite North American free trade rules.

Canada’s Foreign Affairs Minister Chrystia Freeland, U.S. Trade Representative Robert Lighthizer and Mexican Secretary of the Economy Ildefonso Guajardo presented a united front on a stage as talks wrapped up in Mexico City.

Each in turn praised the “hard work” negotiators did at the table. Lighthizer said their efforts consolidated into two dozen chapters that will form the basis for the next round of talks to be held in Ottawa Sept. 23-27.

A joint statement issued by the three after their appearance emphasized that “important progress was achieved in many disciplines” and said more is expected in the coming weeks as negotiators take a break to consult with their respective industry associations and political decision-makers.

The communiqué said all three countries “reaffirmed their commitment to an accelerated and comprehensive negotiation, with the shared goal of concluding the process towards the end of this year.”

However speaking to reporters in Mexico City, Freeland acknowledged there are disagreements even as she insisted “North American relations are fundamentally solid.”

“Of course this doesn’t mean we’re going to agree on all points. But our deep friendship will permit us to resolve disagreements which arise at times” she said, as negotiators focus on the “difficult task of modernizing NAFTA.”

She said all “wholeheartedly share the goal of reaching a mutually beneficial agreement.” She rhymed off data to say the North American Free Trade Agreement has benefited the U.S. to the tune of an extra $127 billion in economic activity each year since it was signed.

And in contrast to U.S. President Donald Trump’s threat to ditch the talks and kick-start the legislative process to kill NAFTA, Trump’s chief trade envoy Lighthizer agreed there was “mutual agreement on many important issues.”

But Lighthizer also stressed a new NAFTA that benefits U.S. workers and industry is a “very important priority” for Trump.

“That’s why American delegation focused on expanding opportunities for American agriculture services and innovative industry, but …we also must address the needs of those harmed by the current NAFTA, especially our manufacturing workers.”

“We must have a trade agreement that benefits all Americans and not just some at the expense of others,” Lighthizer said. “I am hopeful that we can arrive at an agreement that helps Americans workers, farmers and ranchers while also raising the living standards of workers in Mexico and Canada.”

Guajardo struck a conciliatory note after last week, saying Mexico had to work on a “plan B” and anticipate a failure of the talks. He said Tuesday that Mexico was committed to a process that accommodates “each country’s interests.”

“In the process, I recognize we have responsibility to translate our negotiations into a final result that will imply more jobs in North America, jobs that are well-paid jobs, and to strengthen basic principles in this continent,” he said.

It was a diplomatic dance that belied many of the difficulties behind the scenes. Sticking points include the U.S. insistence on gaining greater access to Canada’s dairy and poultry sectors, its demand to end independent dispute resolution processes, and its demand that “Buy American” provisions — whether for auto parts or for government procurement projects — be protected.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said in an interview that one of the difficulties is that although the U.S. insists it wants to increase American content in the automotive sector by drafting tougher “rules of origin” or stiffer tracing of the origin of auto parts, it still has not put any substantive numbers on the table. Right now, vehicles and auto parts are required to have 62.5-per-cent North American content to travel tariff-free across continental borders.

Volpe suggested the failure of the U.S. trade representative (USTR) office to put a hard number on the table may in fact be a good thing. He said the USTR may be documenting for the Trump White House data that negotiators, senators and congressional leaders, especially those with auto plants in their districts, already know, having recently gone through trade negotiations for the Trans-Pacific Partnership that also dealt with “rules of origin” debates.

“The fact that we haven’t seen a number and we haven’t seen proposals confirms for me that the USTR is doing the hard work of inventorying where the American assets are, and they’re going to get to the same conclusion that we did: the American assets and interests are all over the map in North America. It’s going to be very difficult to cleave them off.”

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