January 31st, 2018: NAFTA talks successfully passed the critical round 6 in Montreal as the three countries moved closer towards a renewed and modernized agreement over the past week. However, several issues remain unresolved and a number of radical proposals from the Trump Administration remain unresolved. The three countries have two additional rounds of negotiation planned on the books, if the agreement isn’t resolved before the Summer, many experts believe that negotiations will enter a hiatus until the conclusion and outcomes of the Mexican Federal and US Midterm elections.

The Canadian Chamber staff were in Montreal last week, representing the interests of the Chamber network. They were pleased to report back that the three negotiating teams continue to engage constructively on technical issues and are parking several chapters at the final stages.

Many Hamilton manufacturers, in particular, were interested in the automobile industry discussions. Prior to this round of negotiation, the US Government had proposed a radical amendment, raising the Made in NAFTA content requirements to 75% with 50% of it Made in the US. There also was strong language on new procedures to investigate instances where auto parts themselves are utilizing foreign components.

In response, according to the CCC summary, the Canadian Government offered their own recommendations:

•  Canada presented a new proposal for regional content rules. The proposal reportedly considers IP and software towards regional content value, and “credits” R&D
  centres with added regional content, expanding on the current model that counts only physical inputs. Ambassador Lighthizer expressed doubts, saying this would lead to
  “exactly the opposite of what we are trying to achieve” – arguably more jobs in manufacturing. This type of posturing is to be expected at this early stage.
• On dispute settlement mechanisms, Canada and Mexico are partnering on a counterproposal to the U.S. idea of an opt-out ISDS scheme. The new proposal would see Canada and Mexico striking a bilateral ISDS mechanism (modelled after CETA’s permanent courts), leaving the US outside and unprotected. While this might be agreeable to Ambassador Lighthizer – who is unsupportive of ISDS – the American business community and Congress would likely oppose it and pressure the Administration to preserve a dispute settlement mechanism for all three countries.

Other discussions on issues like Softwood Lumber, Dairy Industry and a US proposal to limit access to their procurement to the equivalent dollar amount American businesses were able to procure in Canada remained unresolved.

See here for additional summaries:

Canadian Chamber NAFTA Memo_January30th

Earnscliffe Strategy Group 

Financial Post / Canadian Press

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The Hamilton Chamber is actively monitoring the negotiations and working in partnership with the Chamber networks and relevant associations to communicate the interests of our membership within the NAFTA negotiation.

For more information or any questions, please contact: Huzaifa Saeed | Policy & Research Analyst | Hamilton Chamber of Commerce | t: 905-522-1151 ext: 230 | e: h.saeed@hamiltonchamber.ca

 

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