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MacNaughton says no rush on NAFTA renegotiation

Canada's US ambassador wants quick deal but won't take bad one.

July 19, 2017   by Dean Bennett

EDMONTON — Canada’s ambassador to the United States says he is pushing hard for a timely resolution on the NAFTA renegotiation, but he won’t accept a bad deal to get it.

“We’ve heard from Canadian business (and) from the provinces that there’s a certain amount of uncertainty that is causing people to perhaps delay investments,” David MacNaughton said July 18, the opening day of the premiers annual summer meeting.

“Obviously if we could get a clarification of the trading relationship sooner rather than later it would be better, but having said that we’re not going to rush into a bad deal.

“We’re ready to sit down and work on this negotiation for as long as it takes to get something that is going to be good for Canadians.”

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MacNaughton made the comments prior to briefing the leaders of Canada’s provinces and territories on trade and the upcoming NAFTA talks.

In May, US President Donald Trump’s administration gave notice it wants to renegotiate the 23-year-old tripartite North American Free Trade Agreement. The president says it is obsolete and unfair to American workers.

On July 17, the US released a list of what it wishes to see changed when talks begin next month.

The US wants more exports of its dairy and other agricultural products, free trade in telecommunication and online purchases, and the elimination of independent dispute resolution panels, which have ruled in Canada’s favour on contentious issues such as softwood lumber.

MacNaughton said some form of external dispute resolution is critical.

“Whether or not that dispute resolution mechanism can be improved or modernized, I think we’re up for discussions around that, but there needs to be some kind of a dispute resolution mechanism as part of the agreement.”

MacNaughton said recent discussions with US business leaders, state governors and the Trump administration suggest everyone is seeking a fair and balanced deal. But if the US wants Canada to loosen up on subsidies and protectionist rules, the ambassador says bring it on.

“The US dairy industry is heavily subsidized and heavily protected, as is their sugar industry and a number of other areas, so if they want to start talking about opening up agricultural markets we’re happy to talk about them opening up theirs.”

Canadian Prime Minister Justin Trudeau says he will continue to defend the supply management system that protects the Canadian dairy industry in talks about revamping NAFTA.

A US House subcommittee raised the long-standing trade irritant at its hearing on NAFTA negotiations, suggesting Canadian measures to protect the industry will be a sticking point.

Congressman Ron Kind, a Democrat from Wisconsin, says he does not want to jeopardize a crucial trading relationship with Canada but thinks the system should be more balanced.

Trudeau said Canada has signed significant trade deals with Europe, North America and elsewhere while protecting the supply management system.

Quebec Premier Philippe Couillard said given that the US list of NAFTA concerns is 16 pages long, Canadians should not expect a resolution anytime soon.

“It would be extremely unlikely that such a wide, broad list of subjects could be settled in a matter of months,” Couillard said. “It will take years. It’s a long, long negotiation.”

Ontario Premier Kathleen Wynne said she has spoken to 22 state governors as well as with federal lawmakers. The prevailing feeling on both sides of the border, she said, is that no harm be done to the trade agreement.

“What I have found in the United States is that there’s a very deep understanding among leaders there that the connectivity between our economies is important for both of us,” said Wynne.

Manitoba Premier Brian Pallister said premiers need to continue to reach out to U.S. governors and lawmakers to make the case for cross-border trade.

“There’s tremendous strength in working together and building things together,” said Pallister.

Nova Scotia Premier Stephen McNeil said while the federal government will carry the ball on talks, he wants to make sure there’s a way for provincial concerns and suggestions to be heard.

“There’s no indication on my end that (the pathway) won’t be there,” said McNeil. “We just need to continue to make sure and be clear about that.”
McNeil said timing is critical.

“What I want to make sure … is that these negotiations don’t linger on,” said McNeil, whose province is a heavy exporter of seafood and rubber to the US.

“The investment world needs certainty. Both of our countries need this.”

On July 17, Saskatchewan Premier Brad Wall suggested Canada should compile a discreet list of retaliatory measures should the NAFTA talks “get off the rail.”

Asked about that strategy, Notley said now is the time to focus on what unites rather than divides the two sides.

“We’re not at the point of engaging in retaliatory strategizing,” said Notley.

She compared NAFTA’s interdependent trade links to the intricate weave of a sweater. Pull one thread, she said, and more threads come loose.

“There’s nary a string that can be pulled on any one of them without pulling out the whole sweater,” she said.


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