Politics

NAFTA talks still not close to a deal, Canada's chief negotiator says

Canada, the United States and Mexico are still "quite a distance away" from agreement on key aspects of a revised North American Free Trade Agreement, Canada's chief NAFTA negotiator said today.

Washington's concession on auto parts was progress, but not enough to seal the deal, says Verheul

Canada's chief NAFTA negotiator Steve Verheul speaks to the media as he leaves for the lunch break at the sixth round of the North American Free Trade Agreement Thursday, January 25, 2018 in Montreal. (Ryan Remiorz/Canadian Press)

Canada, the United States and Mexico are still "quite a distance away" from agreement on key aspects of a revised North American Free Trade Agreement, Canada's chief NAFTA negotiator said today.

Optimism bloomed last week when U.S. negotiators dropped their contentious demand that all vehicles made in Canada and Mexico bound for the U.S. market contain at least 50 per cent American-made components.

Lead Canadian negotiator Steve Verheul said that while that compromise was a positive signal, there are still outstanding issues that need to be resolved.

"Right now, we are still quite a distance away from any kind of agreement on the approach to auto rules of origin," said Verheul, speaking to reporters in Ottawa. "We had issues around dispute settlement and ensuring that dispute settlement provisions will be enforceable in any kind of new NAFTA.

"We have concerns about U.S. proposals on government procurement, we have concerns about the U.S. proposal on the sunset clause, a number of other issues that are going to be difficult to resolve."

Foreign Affairs Minister Chrystia Freeland echoed those comments during a conference call from Seoul, South Korea, with journalists Wednesday evening.

"These are challenging negotiations, we always knew that, but we are going to keep on working hard and we would like to get to the finish line as soon as it is possible to get there," she said. 

Canadian NAFTA negotiator Steve Verheul discusses the remaining challenges in NAFTA negotiations 1:10

In effort to get a deal as quickly as possible, the U.S. has established a May 1 deadline. If the deadline is not met, the Trump administration could suspend an exemption it gave Canada and Mexico on new steel and aluminum tariffs.

"We've made it clear to the U.S. we're prepared to negotiate at any time, any place, for as long as they're prepared to negotiate," said Verheul. "But so far, we haven't really seen that process get going.

"I think if we're going to try to move this process forward we need to work very intensively over the coming weeks."

Verheul's cautious tone stood in stark contrast to the bullish outlook offered by U.S. Trade Representative Robert Lighthizer during an interview with U.S. broadcaster CNBC Wednesday.

"I'm hopeful. I think we are making progress. All three parties want to move forward," said Lighthizer, the top U.S. trade official.

"If there's a real effort made to try to close out and to compromise and to do some of the things we all know we should do, I'm optimistic we can get something done, in principle, in the next little bit."

Lighthizer acknowledged there is political pressure on the U.S. to reach a new agreement before the current Mexican government leaves office because there is worry — with a new government — that NAFTA talks could drag into 2019.

"We have a short window because of elections and things beyond our control," he said.

Freeland said that the U.S. has offered some creative solutions to resolving sticking points such as the rules of origin issue, which she described as "the most complicated part of our negotiation."

"I do think, as [Lighthizer] has said, as has been reported, we have now made some good progress on rules of origin, particularly in the auto sector. As we said all along, this issue is one of the most complicated and has really been at the heart of the agreement."

U.S. domestic trade law also requires 195 days for consultations on a new trade agreement before lawmakers can vote. The absolute drop-dead date for starting that 195-day clock, before a new Congress takes office on Jan. 3, 2019, is June 21 — although one trade expert says the practical deadline is even earlier.

Verheul said he has not yet received a formal invitation to the next round of meetings and he's still waiting to see whether that will happen.

Verheul was in Ottawa Wednesday to meet with Unifor National President Jerry Dias and Mexican and Canadian labour leaders for a roundtable on worker's rights.

With files from Mike Blanchfield and Alexander Panetta, Canadian Press

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