US and Canada race to salvage Nafta

Negotiations entered a crucial phase after the US and Mexico announced a bilateral deal on Aug 27, 2018, paving the way for Canada to rejoin talks to salvage the North American Free Trade Agreement.
Negotiations entered a crucial phase after the US and Mexico announced a bilateral deal on Aug 27, 2018, paving the way for Canada to rejoin talks to salvage the North American Free Trade Agreement.PHOTO: REUTERS

WASHINGTON • Talks between Canada and the United States have intensified as the two countries push to hammer out a deal on a revamped North American Free Trade Agreement (Nafta) due by today, with both sides upbeat about the progress made so far.

Despite some contentious issues still on the table, the increasingly positive tone contrasted with US President Donald Trump's harsh criticism of Canada in recent weeks, raising hopes that the year-long talks will conclude soon with a trilateral agreement.

Negotiations entered a crucial phase this week after the US and Mexico announced a bilateral deal on Monday, paving the way for Canada to rejoin talks to salvage the 24-year-old Nafta that accounts for over US$1 trillion (S$1.36 trillion) in annual trade.

Mr Trump had set today as the deadline for the three countries to reach an agreement, allowing Mexican President Enrique Pena Nieto to sign it before he leaves office at the end of November. Under US law, Mr Trump must wait 90 days before signing the pact.

The US President has warned that he could try to proceed with a deal with Mexico alone and levy tariffs on Canadian-made cars if Ottawa does not come on board, although US lawmakers have said ratifying a bilateral deal would not be easy.

Negotiators were expected to work through the night yesterday ahead of more talks between Canada's lead negotiator, Foreign Minister Chrystia Freeland, and US Trade Representative Robert Lighthizer. Mr Trump and Canadian Prime Minister Justin Trudeau expressed optimism on Wednesday about reaching a deal by today, although much work remains on specific issues.

 
 
 

One sticking point for Canada is the US effort to dump the Chapter 19 dispute-resolution mechanism that hinders the US from pursuing anti-dumping and anti-subsidy cases. Mr Lighthizer said on Monday that Mexico had agreed to eliminate the mechanism.

But Ms Freeland said late on Wednesday that "the Canadian view on Chapter 19 is well known". "I think it will be most effective if we keep our negotiations on specific issues to the negotiating table," she told reporters.

REUTERS

A version of this article appeared in the print edition of The Straits Times on August 31, 2018, with the headline 'US and Canada race to salvage Nafta'. Print Edition | Subscribe