Politics

Canada and U.S. clash over sunset clause in 'forceful' NAFTA talks

Canada's Foreign Affairs minister and her U.S. trade counterpart had an intense exchange of views during a private NAFTA meeting on Tuesday. A source with direct knowledge of the situation said the conversation was 'forceful' and both countries were digging in their heels over an American demand for a sunset clause.

Source says tensions emerged in meeting between Freeland and Lighthizer

Foreign Affairs Minister Chrystia Freeland delivers her statement to the media as United States Trade Representative Robert Lighthizer looks on during the sixth round of negotiations for a new North American Free Trade Agreement in Montreal, Monday, January 29, 2018. THE CANADIAN PRESS/Graham Hughes (Graham Hughes/Canadian Press)

Foreign Affairs Minister Chrystia Freeland and her American counterpart in the NAFTA talks had a "fairly forceful" exchange of views Tuesday over the American side's demand for a sunset clause, a source tells CBC News.

A senior source with direct knowledge of the situation said tensions emerged when Freeland and U.S. Trade Representative Robert Lighthizer began discussing the proposal to write a time limit into a new NAFTA deal.

The sunset clause, put on the table by the Americans, would force all three countries to proactively agree — every five years — that they will remain in the trade pact. If they do not agree, the deal will be automatically killed.

Canada and Mexico do not support the demand; both countries say it would create economic instability.

Freeland told reporters Wednesday she has two problems with the sunset clause idea.

First, she said it would add an element of uncertainty to what she thinks would be a good agreement. Second, she pointed out that NAFTA already has a clause allowing countries to leave.

"Canada's position on the sunset clause is unchanged," Freeland told reporters on her way into the U.S. trade building for her next meeting with Lighthizer.

"Our view is that this is absolutely unnecessary."

The senior source said that when the issue came up during Tuesday's bilateral meeting between Freeland and Lighthizer, there was a "fairly forceful" exchange of views — indicating neither side is willing to compromise.

The source was careful to add, however, that the overall tone of recent NAFTA talks has been positive, and expressed the hope that Tuesday's incident won't impede progress.

A second source familiar with the meeting dismissed the suggestion that tensions are emerging over this issue, adding "no voices were raised." 

The source said "Lighthizer and Freeland have a cordial and close relationship."

Freeland arrived in Washington Tuesday for another series of high-level meetings with her American and Mexican counterparts.

Flavio Volpe of the Automotive Parts Manufacturers' Association on the state of NAFTA talks in the automotive sphere 4:22

Talks continue today, with officials focusing mostly on the auto sector.

The source said the Americans have come to the table with creative ideas and compromises on auto, but Canada and Mexico are waiting for more details.

Chief negotiators have been meeting in Washington around the clock for nearly four weeks straight as all three countries work to reach an agreement in principle in the near future.

If an agreement is not reached in the weeks before the July 1 Mexican federal election, talks could be delayed significantly.

As well, the upcoming midterm elections in the U.S. also could slow down the negotiating process.

About the Author

Katie Simpson is a senior reporter in the Parliamentary Bureau of CBC News. Prior to joining the CBC, she spent nearly a decade in Toronto covering local and provincial issues.

With files from the Canadian Press

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