The Trump administration has released its goals for a new North American free-trade agreement: it’s a list of broad themes, with some hints of irritants ahead.
The U.S. says it wants better access for its exports of agriculture — including dairy products, wine and grain. It also wants freer trade in telecommunications, and online purchases; new rules on currency manipulation; and an overhaul of the dispute-settlement system.
“President Trump continues to fulfill his promise to renegotiate NAFTA to get a much better deal for all Americans,” U.S. trade czar Robert Lighthizer said in a statement.
“Too many Americans have been hurt by closed factories, exported jobs, and broken political promises. Under President Trump’s leadership, (our office) will negotiate a fair deal... President Trump is reclaiming American prosperity and making our country great again.”
The demand on online purchases could pit Canadian consumers versus bricks-and-mortar retailers: the U.S. wants to increase, by 40 times, the amount Canadians can shop online without paying an import tax.
Canada has one of the least permissive duty systems in the world and will be urged to increase its duty-free limit to $800 from the current $20, according to the document released Monday by the U.S. trade czar.
The 16-page list contains some elements that might appear contradictory or confusing.
It says the U.S. will demand more opportunities for American suppliers for government procurement abroad, but at the same time insist on preserving Buy American rules that limit opportunities to foreigners.
It also calls for the elimination of the dispute-settlement system that has ruled in favour of Canada on softwood lumber. But it’s unclear how it would want to replace Chapter 19 — which was a make-or-break issue for Canada in original trade talks.
Canadian negotiators walked away from the table over that dispute-settlement issue, and later, on the final evening of the negotiations, then-prime minister Brian Mulroney informed the U.S. there would be no deal unless it agreed to an international arbitration system.
The Prime Minister’s Office was in touch with the White House — sources say it was given a heads-up in advance of the release. Canada’s Foreign Affairs Minister Chrystia Freeland said she was prepared to start negotiating.
“We welcome the opportunity to modernize NAFTA to reflect new realities — and to integrate progressive, free, and fair approaches to trade and investment,” she said in a statement.
“When negotiations begin, we will be ready to work with our partners to modernize NAFTA, while defending Canada’s national interest and standing up for our values. Canada is the top customer of the United States. Canada buys more goods from the U.S. than China, Japan, and the United Kingdom combined.”
The Canadian government will not produce a similar public list. It’s not a requirement under Canadian law, as it is in the U.S.
Now U.S. lawmakers will have a say. They must be consulted throughout the negotiating process, and will ultimately have to vote on any deal.
Tuesday could provide an early test of the mood on Capitol Hill, when the House of Representatives holds a hearing on NAFTA.