Canadian trade experts wary of NAFTA politics but remain optimistic

Source: Xinhua| 2017-09-07 05:10:08|Editor: Mu Xuequan
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By Evan Duggan

VANCOUVER, Sept. 6 (Xinhua) -- Despite positive messages come from recent NAFTA renegotiations attended by Canadian, Mexican and American trade officials, Canadian trade experts were cautious that a new pact would likely face delays and political speed-bumps.

Canada's Foreign Affairs Minister Chrystia Freeland joined U.S. Trade Representative Robert Lighthizer and Mexican Secretary of Economy Ildefonso Guajardo to express optimism for a new pact on Tuesday, following the second five-day round of NAFTA (North American Free Trade Agreement) talks in Mexico City.

The three officials said in a joint statement that they had made important progress across many fronts and expected more progress in coming weeks as the negotiators consult with industry leaders and their political masters.

The statement said all three partners "reaffirmed their commitment to an accelerated and comprehensive negotiation, with the shared goal of concluding the process towards the end of this year."

That optimism seems to fly in the face of the latest rhetoric of U.S. President Donald Trump who said on Aug. 28 that Canada and Mexico were acting very difficult and he was still considering tearing up the 23-year-old trade pact.

A new NAFTA deal may not come by the end of the year, said University of British Columbia (UBC) trade expert, John Ries.

NAFTA has historically worked well for industry and investors and should have a future so long as Trump's bluster doesn't become reality, he said.

"I don't think he can [tear up NAFTA]," he told Xinhua on Wednesday. "Trump doesn't have the political ability to do anything really dramatic because it's going to hurt various people whatever he does, and there's going to be resistance. I think that NAFTA stays in place."

Ries said the gap between Trump's attacks and Lighthizer's feedback feels a bit like a good cop, bad cop routine.

"The threat of Trump tearing [NAFTA] up and levying 30 percent tariffs might be a useful negotiating ploy," he said. "But as we know, Trump does a lot of tweets that his advisors aren't on side with... You could also think it's an idle threat."

Trump has so far failed on several fronts, including replacing Obamacare and compelling Mexico to pay for his border wall.

"He was going to do lots of things that he didn't manage to pull off," he said.

Behind the optimism remain several hot spots, including the U.S. demand for more access into Canada's market-managed dairy and poultry industries and its demand to eliminate independent dispute resolutions (known as Chapter 19). The U.S. team is also trying to protect its "Buy American" position for the auto-parts industry and for government procurement.

The communique coming out of Mexico City indeed seems like a good sign, said Werner Antweiler, another trade professor at UBC in Vancouver.

"Mr. Lighthizer is a competent and an accomplished trade negotiator, so I see that he has the will to move things along," Antweiler told Xinhua. "His political masters in Washington, that's a different matter."

He said the expectations in the White House may not align with the better senses of Lighthizer and his team.

"If Mr. Trump actually tried to [pull out of NAFTA] through an executive order, it will really send the message that he is not really keen on accomplishing anything in the negotiations," he said. "He is just essentially trying to blackmail the other parties to do something."

Antweiler, however, remains optimistic that a new deal will get done. "Because essentially, the legal authority to negotiate trade agreements and to implement them lies with Congress."

The next round of talks is set for Ottawa on Sept. 23-27.

As for Canada's negotiation team, Antweiler had some advice.

"They are on the right track by furthering a progressive agenda," he said. "Let's own the process. Let's not be pushed by the U.S. Let's basically try to set our agenda of what we want to see in the renegotiations."