Negotiations have kicked off regarding the NAFTA agreement—and finding middle ground seems to be increasingly difficult. Indeed, Donald Trump has steadfastly announced that he will re-negotiate the NAFTA agreement in the best interests of American citizens.

The agri-food industry

The supply management system was condemned by the US president; President Trump deems that US producers are negatively impacted by the NAFTA agreement. At least five US-based associations in the milk industry have announced that they want a similar supply management system in the States. “Don’t put pressure on Canada to weaken the supply management system,” said the National Family Farm Coalition and Institute for Agriculture and Trade Policy in a recent letter. “Penalizing the Canadian system will not significantly boost US exports.” Canada may even make changes to its system to gain wider access to US markets. 

Dispute-resolution process

Washington also wants to eliminate the dispute-resolution process. This process helps countries that are a part of the agreement to call upon a panel of experts if they consider that they are being imposed countervailing duties. This is especially the case with respect to the softwood lumber industry conflict. Until now, governing bodies made their decisions in favour of Canada. 

Arbitration is a lesser-of-two-evils solution for Canada; despite judgements in favour of Canada, the United States does not comply with them. Even if Canada reached a free-trade agreement with the United States in the softwood lumber industry, Québec and Canada would probably not benefit from a lot of advantages. Québec is actually not at the NAFTA negotiating table. Although Raymond Bachand has been appointed a head negotiator, he does not represent Québec. He provides his recommendations to Canada’s head negotiators, Chrystia Freeland and Steve Veurhel. 

Rules of origin

In order to make product rules of origin stricter, the US NAFTA representative wants to decrease imports of products from Asia in favour of US producers.

Canadian unions consider this a good move because it means that Mexican workers will benefit from better salaries and work conditions. In addition, these new measures will make Canada more enticing to foreign businesses. However, some pundits think that rules of origin should be simplified so that SMEs can be exempt from tariffs. 

From Trump’s perspective, he believes that the US should withdraw from the NAFTA agreement. Canada and Mexico are more than willing to remain within it. The next round of negotiations will take place from September 1 to 5, 2017. 

Sources

Radio-Canada. La première séance de négociation sur l’ALENA est terminée. http://beta.radio-canada.ca/nouvelle/1051397/alena-negociations-canada-etats-unis-mexique-economie. . 20 août 2017.

La Presse canadienne. L’automobile au cœur des négociations sur l’ALENA. http://beta.radio-canada.ca/nouvelle/1050828/alena-negociations-industrie-automobile. . 17 août 2017.

Fillion, Gérald. ALENA : le Québec a beaucoup à perdre. Radio-Canada. http://beta.radio-canada.ca/nouvelle/1050454/alena-quebec-beaucoup-a-perdre-gerald-fillion. 15 août 2017.

Krol, Ariane. ALENA : pas le moment de s’affoler. La Presse. http://www.lapresse.ca/debats/editoriaux/ariane-krol/201708/23/01-5127079-alena-pas-le-moment-de-saffoler.php. 24 août 2017.

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