Canada Seeks Business Input on NAFTA Renegotiation Priorities

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By Peter Menyasz

Canada is seeking input from companies and the public on the positions it should take in renegotiation of the North American Free Trade Agreement.

The consultations are intended to help the government develop its negotiating positions on whether to maintain existing provisions or seek new concessions for Canada. Given the possibility of trade-offs in various areas of the agreement, the consultations are critical in setting the government’s priorities, a trade lawyer says.

The consultation is open through July 18.

The 23-year-old trade deal could be enhanced through clarifications and technical improvements in all of the trade areas it covers, as well as to its labor, environment and culture provisions, the government said June 2.

“Given that NAFTA has been in force for over 20 years, the government is seeking information on the areas that have been the most beneficial to Canadian exporters,” Global Affairs Canada said in a notice published in the June 3 issue of the Canada Gazette, Part I.

“Views should also take into account reactions to potential proposals from the United States or Mexico where Canada could be pressed to take on commitments to address perceived trade irritants.”

Comments should also focus on potentially including in the upcoming negotiations trade areas that aren’t currently covered but that are part of more recently reached deals, including transparency and anti-corruption, e-commerce, trade facilitation, treatment of small and medium-sized businesses, state-owned enterprises, cooperation and capacity-building, and regulatory alignment.

Including those kinds of provisions, which Canada negotiated in its recent trade deal with the European Union and the Trans-Pacific Partnership, would help ensure that NAFTA is aligned with current “economic realities”, the government said.

Global Affairs Minister Chrystia Freeland will comment formally on June 3 on the launch of the formal consultations, spokesman Alex Lawrence told Bloomberg BNA June 2. Freeland’s mandate for foreign affairs includes specific responsibility for Canada-U.S. relations and NAFTA.

Input Needed

The consultation is more than pro forma, as the government needs significant input from the business community on priorities for what should be maintained in the agreement and what should be revamped, Toronto trade lawyer Riyaz Dattu said.

“We’re advising our clients that they need to have their voices heard,” Dattu, a partner with Osler, Hoskin & Harcourt LLP, told Bloomberg BNA.

For example, a huge debate is expected on the process in Chapter 19 for resolving disputes over antidumping and countervailing duties, he said. Canadian businesses want to keep the provisions, but if enough companies don’t show support for that position, the government could trade the process away for other priorities, he said.

Canada fought hard for the protections in Chapter 19 and made significant concessions to obtain them, but it appears the U.S. is looking to eliminate the process, mostly due to a “fairly narrow” set of cases involving softwood lumber where the U.S. believes it would have received better results from domestic courts, he said.

However, those cases ultimately ended up before extraordinary challenge committees composed of judges that upheld the NAFTA panels’ findings in Canada’s favor, so the results weren’t different from what the U.S. might have obtained through the courts, he said. “To a certain extent, I think it’s rhetoric on the U.S. side,” he said.

The Canadian government noted that it has already consulted for more than a year with major stakeholder groups on its overall approach to trade, based on recognition that trade policies must respond and contribute to overall economic, social and environmental policy priorities.

To contact the reporter on this story: Peter Menyasz in Ottawa at correspondents@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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