NAFTA rumble: Get ready for Round 4

By Yves Faguy October 10, 201710 October 2017

NAFTA rumble: Get ready for Round 4


Round 4 of the NAFTA renegotiation begins on Wednesday.  And predictably, U.S. President Donald Trump is again making threats about pulling out of the trade deal, just as Trudeau is about to visit the White House to impress upon him that Canada is not really the problem when it comes to viewing it through the lens of trade deficits.

Why this week is important: There are concerns that Trump's tactics are designed to sabotage NAFTA, rather than improve the trade deal. Following this round of negotiations, we should have a better idea of whether the U.S. is serious about striking a balanced deal that all parties can sell back at home.

What could derail negotiations: We can expect that Trump's negotiators will continue to push for raising North American content requirement (as well as for the U.S.) in NAFTA's auto rule of origin, even though U.S. car manufacturers oppose the proposal.  The U.S. is also now applying pressure to get more access to Canada’s supply managed dairy industry. It’s unclear how serious the Trump administration is about this item. What is clear is that it won’t be an easy sell in Canada. Particularly as the parties to NAFTA are also discussing procurement, where Trump is pushing for a “Buy American” exemption – also contentious. And fixing NAFTA’s broken dispute settlement process is also a priority, as well as eliminating Chapter 19 (in antidumping and countervailing duty matters). Unfortunately with recent trade action against Bombardier lurking in the background, positions appear to be hardening.



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