After NAFTA Round 4 wrapped up today, there were some strong words at the press conference. I can't find the full transcript of her remarks, but here is a news report on what Canadian Foreign Minister Chrystia Freeland had to say:
Freeland said the "unconventional" demands from the U.S. are making the work of negotiating the trilateral trade pact "much more challenging." She stressed that NAFTA has created jobs and opportunities for Canada, Mexico and the U.S. for the last 23 years that have benefited middle-class families.
"Yet in rounds three and four, we have seen proposals that turn back the clock on 23 years of predictability, openness and collaboration under NAFTA," she said. "In some cases, these proposals run counter to World Trade Organization rules. This is troubling."
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She also warned that an updated NAFTA can't be achieved with a "winner-takes-all mindset," or one that tries to undermine, rather than modernize, the agreement.
And here is what U.S. Trade Representative Robert Lighthizer said:
Frankly, I am surprised and disappointed by the resistance to change from our negotiating partners on both fronts. We have made some headway on the first objective, but even here we have sometimes seen a refusal to accept what is clearly the best text available in spite of the countries having agreed to it in the past.
In certain cases, partners who agree to TPP have actually rejected its text here. I would have thought by now we could have cleared chapters dealing with digital trade, telecommunications, anticorruption, and several sectoral annexes, for example.
As difficult as this has been, we have seen no indication that our partners are willing to make any changes that will result in a rebalancing and a reduction in these huge trade deficits. Now I understand that after many years of one-sided benefits, their companies have become reliant on special preferences and not just comparative advantage. Countries are reluctant to give up unfair advantage.
That doesn't sound too positive! However, while this is not how I would approach this sort of thing, I can see how others would think it makes sense, especially for the purposes of playing to a particular domestic audience.
Despite the rhetoric, I was actually a bit encouraged by this round. This is the round where all the most contentious issues were put on the table, and yet the negotiations did not break down. Instead, the parties agreed on a much more realistic time-frame:
Parties have now put forward substantially all initial text proposals. New proposals have created challenges and Ministers discussed the significant conceptual gaps among the Parties. Ministers have called upon all negotiators to explore creative ways to bridge these gaps. To that end, the Parties plan on having a longer intersessional period before the next negotiating round to assess all proposals. Mexico will host the fifth round of talks in Mexico City from November 17-21, 2017. Additional negotiating rounds will be scheduled through the first quarter of 2018.
The end of the year deadline they set up initially always seemed a bit unlikely to me. This new schedule is much more reasonable, and, I think, increases the chances of success. I still see a deal to be had, one that could satisfy Canada, Mexico, U.S. politicians and interest groups. I hope the negotiators figure out how to get there.
