Canada and NAFTA: What you need to know about the road ahead – National


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As Chrystia Freeland is in Washington negotiating a brand new NAFTA deal for Canada, there are a variety of prospects within the air of what might occur with the settlement.

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On Monday, Donald Trump introduced that the U.S. and Mexico had come to a commerce settlement, and the U.S. would scrap the NAFTA title in favour of the “U.S.-Mexico Free Commerce Settlement.”

Since Monday, the U.S. has given Canada a deadline of Friday to just accept the U.S. and Mexico’s “discover of settlement,” which incorporates trilateral agreements that had been beforehand negotiated with Canada on the desk earlier than the summer time, based on worldwide commerce and customs lawyer Dan Ujczo.

“Canada has the chance to affix the discover on Friday and may do it in two methods,” stated Ujczo. “One, they will say they’ve a full take care of the U.S. and proceed to draft the textual content. The opposite approach is, Canada can say they agree with the core phrases of the present settlement in precept however they want further time to work out their points.”

WATCH: Canadian International Minister Chyrstia Freeland says they’re coming into a really intense interval of NAFTA negotiations with the U.S. and either side have determined to not negotiate in public.

Ujczo explains that if Canada chooses the second choice, there’s a 30-day interval for revision earlier than the total textual content of the settlement must be revealed on the finish of September, during which Canada can “work out the small print.”

Canada may select to not be a part of the settlement on Friday, however, Ujczo warns, “That opens up an entire Pandora’s field of points,” and there’s hypothesis that it is probably not authorized to pursue a deal that doesn’t embody Canada.

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Trump has threatened that if Canada doesn’t settle for the deal by Friday then he’ll slap auto tariffs on Canada.

The contentious points

There are a variety of points inside the settlement that Canada and the U.S. must work out, which embody dairy, the auto business, mental property, Chapter 19 — the dispute decision mechanism — and the sundown clause.

WATCH: Trudeau pushes again towards Trump’s NAFTA risk: ‘It must be the fitting deal for Canadians’

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Regarding dairy, Canada has in place supply-management insurance policies that give choice to Canadian farmers. The U.S. has pushed for Canada to scale back tariffs on dairy merchandise, however Carleton College political science professor Laura Macdonald says that doing so would have political repercussions for Justin Trudeau, because of the dairy business’s significance in Quebec.

Chapter 19 is a suggestion for dispute resolutions that has been a contentious challenge between the U.S. and Canada prior to now, and which Canada has beforehand stated is “a line within the sand” for them, says Macdonald.

“Chapter 19 is essential [for Canada] as a result of it permits commerce disputes to go to a tribunal, somewhat than Congress or the president,” Macdonald stated. This helps stability energy in disputes.

WATCH: A story of two nations is rising out of the NAFTA talks

The sundown clause, which might drive renegotiation of the deal each 5 years, has been a problem in NAFTA negotiations prior to now because of it taking away stability from the settlement.

Nonetheless, the U.S. and Mexico have agreed to a brand new softer clause that can have the deal come up for assessment each six years, with the deal not expiring till after 16 years, as revealed by public paperwork launched by the U.S. Commerce Consultant.

In line with Macdonald, it appears “Canada could be open to [the new] sundown clause.”

Mexico made ‘significant concessions’ in new trade deal with U.S: Chrystia Freeland

Together with Canada is in Trump’s favour

A Friday deadline leaves little or no time to type out these points, inflicting each Macdonald and Ujczo to confess that it’s unlikely complete deal will probably be reached by Friday.

“I believe the most certainly state of affairs is Canada will agree to affix the discover Friday, with the caveat that there nonetheless are plenty of points that must be handled in that 30-day interval,” Ujczo predicted.

Macdonald identified that these “synthetic timelines” have been set earlier than within the NAFTA negotiations, and are used as a negotiating method to position stress.

“I believe it’s all theatrics on a part of Trump administration,” she stated. “I believe they gained’t be capable to attain a deal by Friday, however they will say they’re near a deal and carry on speaking.”

WATCH: Is NAFTA useless?

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If “Pandora’s field” is opened and a deal can’t be reached with Canada, it could spell hassle for Trump. Each Congress and Mexico have stated they need a trilateral deal, based on Macdonald, and a bilateral deal would possible face opposition in Congress.

With midterm elections on the horizon within the U.S., the stress is on Trump to make a deal earlier than then.

“It’s simpler to get a take care of Canada than with out,” stated Macdonald.

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