Mixed messages from White House on how aggressive to get on trade.
July 17, 2017
by Alexander Panetta
WASHINGTON — After campaigning and complaining about NAFTA for two years, Donald Trump is about to start doing some explaining: the US president is poised to release a list as early as today revealing how he wants to change the deal.
American law requires that the administration publish a list of its objectives entering trade negotiations. The reason this could happen any day is because the administration hopes to start negotiations around Aug. 16 and the law requires this list be posted online 30 days in advance.
Expect the Canadian government to say little in response to the list.
“I can’t imagine that we would start negotiating before the negotiations actually start,” Prime Minister Justin Trudeau said Friday. “We’re going to be responsible about this, to be thoughtful and responsible in how we engage the administration.”
That tight-lipped approach stems from the Canadian government’s overall strategy: Make the Americans lay out their cards first, given that they asked for these negotiations and in the parlance of trade talks are the “demandeur.”
The US has signalled wildly conflicting approaches.
Trump keeps threatening to rip up the trade agreement in the absence of a major renegotiation. His vice-president just delivered a speech exuding collegiality and promising a new NAFTA that would be a “win-win-win.”
The signals to Congress have been equally contradictory.
In a leaked draft of a letter to lawmakers, the administration showed a desire to play hardball and seek changes that would be deemed non-starters by the other countries. It later released a bare-bones, modest version of that letter.
It was with this letter that the Trump administration formally declared its intention to enter trade negotiations with Canada and Mexico. Those mixed messages are due in part to philosophical differences within Trump’s team about how aggressive to get on trade.
A veteran of US trade negotiations suggests this upcoming notice will fall somewhere between the two versions of those letters to lawmakers: more detailed than the final version, less expansive than the draft.
“It will be more specific but I think still broad-brush bullet points on what they want to accomplish,” said Welles Orr, a senior US trade official under George H.W. Bush and Bill Clinton.
“So no surprises. I don’t expect we’re going to see anything that pops out as ‘Oh, wow, we didn’t see this coming.’ So I think it’ll be kind of perfunctory.”
Here’s what he expects in the new NAFTA: modern chapters on digital commerce, modelled on those in the now-dormant Trans-Pacific Partnership; changes to auto-parts import rules that all three countries can live with; and a bruising fight over dairy.
He predicts the dairy issue will come down to the final wire: “That’s the hotbed issue that’s hanging out there that will be the last issue to get resolved. But if that’s resolved, I don’t see a whole lot of contention on the Canadian side.”
The reason the administration has to publish this list, and release letters to Congress, is because of a deal between the legislative and executive branches of the US government, enshrined in what’s known as a fast-track law.
Under the terms of that deal, US lawmakers relinquish their power to amend an international agreement, as is their right under the US Constitution; in exchange, lawmakers are consulted throughout the negotiating process.
That process includes public hearings – on July 18, for instance, the House of Representatives committee in charge of trade will hold a hearing on NAFTA, how it’s worked, and how it could be modernized.
It was Orr’s job to act as a liaison to Congress as the deputy assistant US trade czar.
He believes the administration will deliver more specific marching orders to the negotiating team in the upcoming public notice, including a desire to work quickly. That desire for a fast negotiation could be hindered by the fact that the US trade czar’s office still has numerous positions unfilled.
But he believes it can be done this year: “I think what is going to play out is a relatively short negotiation. Meaning a deal can be probably hatched by December… I think there’s a more expedient need (for Trump) to get a win, that would put a lot of what might be seen as controversial issues to the side for the sake of getting this win.
“This is one of his hallmark campaign issues. He has to have a win. He has got to show that he’s done something. I think he can make some modest improvements – necessary improvements, that brings (NAFTA), frankly, into a more 21st century agreement,” said Orr, now a trade adviser at the Washington law firm Miller & Chevalier.
Canada’s largest private sector union has submitted its own wish list to the Canadian government. Unfor, which represents more than 310,000 workers, says a renegotiated NAFTA must include enforceable labour and environmental standards, and the elimination of the disputes settlement system.
“For the first time in a generation, we have a chance to fix a trade deal that has hurt Canadian workers and their communities…,” said Unifor president Jerry Dias. “International talks on trade have to go beyond a tweak here and a little change there. What we need is a fundamental change in way we approach trade, beginning with NAFTA.”
Unifor’s position statement makes several recommendations:
• Strong labour and environmental rules, with trade liberalization tied to adherence to those rules.
• Abolish Chapter 11 giving corporations the right to sue governments over lost profits.
• An overhaul in the rules governing auto trade across borders.
• Protection of supply management and its ability to provide a safe and stable food supply.
• Protection of cultural industries such as TV, film and journalism.
• No further weakening of foreign ownership rules in telecommunications, and no restrictions on licensing conditions for foreign online broadcasters.
• Ensure public services such as health and education are explicitly carved out of a new NAFTA.
• End the requirement to continue oil and gas exports to the U.S., even during a shortage in Canada.
• A new continental standard on the use of domestic purchasing policies, reflecting governments ability to direct public procurement to domestic suppliers in fair and equitable way.
Files from PLANT Magazine.News from © Canadian Press Enterprises Inc. 2016