United States Trade Representative Robert Lighthizer has released his negotiating objectives ahead of talks to revise the North American Free Trade Agreement next month, and several will pose problems for Canada at the bargaining table.
In an 18-page summary released Monday, the USTR outlines how the U.S. will seek to eliminate NAFTA’s Chapter 19 dispute resolution panels. Canada uses these to appeal duties on things like softwood lumber, and the elimination of the panels was perceived as a potential red line for Canadian negotiators heading into the talks, expected to begin Aug. 17.
American negotiators also want to exempt local and state governments from having to open up government contracts to Canadian and Mexican firms. That’s something Canada hoped to achieve in this negotiation, similar to how subnational procurement is opened up to foreign companies in Canada’s new trade deal with the European Union.
Softwood lumber is not mentioned by the USTR, but a single line on page 14 will draw the immediate attention of Canadian negotiators.
Canada is preparing to appeal punishing new anti-dumping and countervailing duties recently imposed by the U.S. Commerce Department on Canadian imports, unless an agreement can be reached to settle this latest flare-up in a long-running dispute between the two countries.
What the U.S. is now seeking would eliminate Canada’s ability to appeal this move to a NAFTA dispute panel. Canada could still appeal to the World Trade Organization, but winning in NAFTA arbitration is preferable to ensure duties are returned to Canadian producers, something a WTO win does not guarantee.
“My initial take is a sense of relief, because what I see is traditional trade policy language using the existing rules of the road in ways that Canadian negotiators can deal with,” Laura Dawson, the director for the Canada Institute at the Wilson Centre, told CBC News Network’s Power & Politics.
But eliminating Chapter 19…