Canada Says Mexico's Significant Concessions Pave Way for Potential Deal
Canadian Foreign Minister Chrystia Freeland said her team is optimistic about the progress the U.S. and Canada can make in NAFTA negotiations this week, before the U.S. plans to start the fast-track clock in Congress. "A lot has been accomplished," she said, though she said there's still a "huge amount of work to do this week."
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"What has really paved the way for what Canada believes will be a good week is the fact that Mexico has made some significant concessions, particularly in the area of labor and the rules of origin on the cars. For our government, good jobs for working people in Canada has always been our priority, and these concessions are really going to be valuable to workers in Canada and the United States who have been concerned for some time about their jobs going to lower-wage jurisdictions. So for us, that's a very important piece," she said Aug. 28, as she left an hourlong meeting with U.S. Trade Representative Robert Lighthizer. She added that these concessions "must have been quite difficult for Mexico."
Although the wage component of rules of origin was aimed directly at pleasing auto manufacturing workers, the United Autoworkers, along with the unions representing steelworkers, machinists and communications workers, issued a cautious statement after the bilateral deal was announced.
"There is more work that needs to be done to deliver the needed, real solutions to NAFTA’s deeply ingrained flaws," said the unions, some of which represent both Canadian and American workers. "Any new deal must raise wages, ensure workers’ rights and freedoms, reduce outsourcing and put the interests of working families first in all three countries. And working people must be able to review the full and final text and have the confidence not only in the terms of the deal, but its implementation, monitoring and enforcement." They said "the devil is in the details."
Freeland had said on Aug. 28 that the ministerial talks would tackle the details on Aug. 29, and she batted away questions about Chapter 19 and access to Canada's dairy market. Asked if NAFTA would follow the Trans-Pacific Partnership, which opened the Canadian dairy market a little to foreign sellers, Freeland said, "When it comes to specific issues that we've been discussing, and the specific progress that we're making, this, as everyone knows, is an extremely intense period in the negotiation, and Ambassador Lighthizer and I have agreed that the best way to make progress is not to be negotiating in public on specific issues," she replied. Christopher Sands, director of the Johns Hopkins University Center for Canadian Studies, said that approach is a good sign that things are serious.
Freeland said Canada's technical staff worked through the night with the text. They also worked with their U.S. counterparts during the afternoon of Aug. 29. Lighthizer and Freeland planned to reconvene at 5 p.m. on Aug. 29 to review their progress. Freeland denied the characterization that Canada had been isolated by the Mexico-U.S. bilateral work. Canada met with Mexican officials in the evening after Freeland's first meeting with Lighthizer.
She declined to talk about Chapter 19, the area of NAFTA that allows a country to challenge other countries' adherence to their trade remedy laws. She merely said, "The Canadian position, and the issues that are of particular importance to Canada, are well-known."
With regard to Trump's comments that Canada might be left out of NAFTA, she said, "Our position from the outset has been that we hope for the best, but we are always prepared for all scenarios. We will, as we have done throughout this negotiation, stand up for the Canadian national interest and Canadian values while looking for areas where we can find a compromise that everyone can live with."
The U.S. intends to notify Congress on Aug. 31 that a deal has been reached, but if Canada has not settled its issues, it's possible that notification could leave room for Canada to come in before the end of September, when the treaty language must be released to the public. According to Canadian media reports, Prime Minister Justin Trudeau said that there's a possibility Canadian issues could be settled by Aug. 31.
Sands said, "I think the Canadians will need a little more time than the weekend," and he thinks that even with a few more weeks to hammer out language in September, they'd have to have enough of a deal in principle that it might be too heavy a lift. He said Trudeau could take one of two tacks for his political future.
"We solve this now and look like we conceded under pressure, and then we go to election next year, [say] we saved NAFTA, we navigated through the choppy waters, re-elect us," Sands said is one way to go. "The other option is that Trudeau says, I don’t think I can get a deal that I feel is safe to go to the polls next year. He could call a snap election." In that case, he said, there would be a NAFTA timeout for the 36-day campaign, and his approach would be to campaign against Trump.
If he won, the Canadian team would return to the table, and Trudeau's message would be: "I have a mandate to do this deal, but I do not have a deal to be a poodle," Sands said.