‘Together, we will fix NAFTA’: U.S. ambassador confident deal will be reached despite obstacles
Despite outstanding obstacles in ongoing NAFTA negotiations, including Canada’s dairy supply management system, the U.S. Ambassador to Canada said Wednesday that the U.S. is confident a modernized version of the agreement will be reached soon.
“I’ve got every confidence that together we will fix NAFTA so it can work for the next 25 years, (with) fixes that ensure flexibility as our economies evolve, that ensure prosperity is shared by everyone,” Craft said in a speech at an Empire Club of Canada lunch in Toronto.
“I’ve yet to meet a Canadian who thinks the 24-year-old agreement is perfect. It’s like a solid house. It needs to be updated to reflect the 21st century standards and realities, but there is no need to tear it down.”
Craft’s comments regarding NAFTA negotiations come as the Trump administration reportedly pushes to quickly reach a preliminary deal that could be announced at the Summit of the Americas in Peru, which begins April 13.
Canada, the U.S. and Mexico appear to have made significant progress in negotiations over the last several weeks, including a breakthrough on a contentious auto rules of origin demand proposed by the Americans.
On Wednesday, Bloomberg reported that the Trump administration softened its demand for more North American content in car manufacturing. The U.S. had originally proposed increasing North American auto content requirements from 62.5 per cent to 85 per cent, but its latest proposal reportedly would only apply the threshold to major components such as engines, and not simpler inputs like nuts and bolts.
Canada’s Ambassador to the U.S. David MacNaughton, who was at Craft’s speech, told reporters the summit in Peru would provide “a good chance” for the three leaders to “work really hard to try and get as far as we can.” However, he noted that despite recent progress, there are still major outstanding issues that need to be overcome.
“I don’t know what an agreement in principle looks like, really,” MacNaughton told reporters. “There’s still lots of issues. There’s differences of opinion and we are going to work hard to try and narrow down the gaps, and try to get to as much of an agreement as we possibly can.”
Some of those issues were also highlighted in Craft’s speech.
“Now I can bore you with the sad story of the American dairy producers and the Canadian supply management system that keeps us from competing in this market, or I could talk about the market access for American telecom companies or drug patents,” Craft said.
“Let’s just say the list of these kind of grievances is long on both sides of the border.”
Other significant issues that remain outstanding in the negotiations include the U.S. Trade Representative’s five-year “sunset clause” that would see the agreement expire in five years unless the three countries agree to extend it, as well as the American’s desire to water-down the strength of NAFTA’s Chapter 11 dispute resolution panels — proposals Canada is against.
Still, MacNaughton said he shared Craft’s confidence that a modernized agreement would be reached soon.
“When there is uncertainty around trade, the markets don’t do so well,” he said. “I think it’s in everybody’s interest to bring certainty back to the investment climate, and that’s what we’re going to do.”
Email: asiekierska@nationalpost.com | Twitter: Alicjawithaj