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Alexander Panetta and Mike Blanchfield
January 29, 2018
MONTREAL — The NAFTA train remains on track — for now.
The U.S. trade czar Robert Lighthizer says enough progress has been made over the past week to warrant moving forward with a fresh round of talks in Mexico, but he’s also making it clear that more work needs to be done in the coming weeks.
Lighthizer is unsatisfied with Canadian proposals aimed at breaking a logjam on autos, and levelled multiple complaints about Canadian behaviour, including a wide-ranging complaint to the World Trade Organization he described as a “massive attack” on the American trading system.
On balance, he sounded like a man willing to give NAFTA a chance.
“Some real headway was made here,” Lighthizer said after a week-long round of talks concluded Monday.
“The United States views NAFTA as a very important agreement. We’re committed to moving forward. I am hopeful progress will accelerate soon. We’ll work very hard between now and the beginning of the next round — and we hope for major breakthroughs in that period. We will engage both Mexico and Canada urgently, and we will go where these negotiations take us.”
Lighthizer’s long-awaited verdict on the sixth round of marathon talks in Montreal came at a public event alongside Foreign Affairs Minister Chrystia Freeland and Ildefonso Guajardo of Mexico. The three held a series of face-to-face bilateral meetings before their final closed-door, three-way huddle.
It was the first such group appearance since the trio’s memorably tense encounter in the fall.
We’ll work very hard between now and the beginning of the next round — and we hope for major breakthroughs in that period
But Lighthizer sounded multiple alarm bells.
He panned Canada’s proposal on autos, saying it would do the reverse of what was intended, and would lead to more Asian content in North America. He called a Canadian proposal on services trade a poison pill, blasted Canada’s international trade complaint, and demanded a rebalancing of the trade deficit in goods.
Freeland and Lighthizer went to great lengths to dispel the notion that the two don’t actually like each other, an impression created by frosty body language and rhetoric that last time the two shared the NAFTA stage last fall.
Lighthizer offered smiles and fond memories of vacationing in the Montreal area with his family in the past. Freeland was asked whether her relations with her U.S. counterpart might derail the talks and offered a one-word reply: “No.”
“Without being overly optimistic, I am heartened by the progress,” Freeland said, citing the closing of an anti-corruption chapter and other constructive conversations.
One prominent stakeholder described Lighthizer’s remarks as purely tactical.
“I think he’s a good negotiator,” said Flavio Volpe of the Canadian Auto Parts Manufacturers Association.
“I don’t really take a lot of the stuff at face value. But it’s important for us to understand the sentiment. And the sentiment is, ’We’re not satisfied, we’re not going to put our guard down, and we’ll see you in four weeks.”’
Dave Reichert, an American lawmaker who spoke with Lighthizer, said he sounded hopeful. But Reichert warned not to expect too much enthusiasm given the U.S. trade representative’s famously gruff style.
Important decisions about NAFTA’s future are now in the hands of Trump’s administration. American negotiators passed the baton on Sunday to political decision-makers how to major discussions about autos, dispute resolution and a five-year review clause.
The Montreal round represented a new phase for the negotiations.
It included a first significant back-and-forth dialogue on autos and other major sticking points. Sources say there were three hours of talks over two days about the autos proposal.
Earlier rounds had effectively hit a roadblock because of scant engagement on the most serious files. After the U.S. made proposals that shocked Canada and Mexico, they responded by insulting the U.S. ideas and even devoted one round to describing reasons why the American proposal on cars was so impractical.
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