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NAFTA Re-Negotiation: Round 3

Published by CME Manitoba on October 05, 2017

Round three of NAFTA renegotiation took place in Ottawa from September 23 – 27 and once again CME was on the ground representing the business interests of members. Throughout the week CME staff met with a variety of key representatives ranging from the Prime Minister’s Office, opposition party critics, the negotiating team, the Mexican Ambassador and business delegation, as well as senior US Department of Commerce and US Embassy officials.

From these meetings it remains clear that all parties remain committed to the aggressive pace of negotiations with the intent of concluding discussions by the end of the year. Progress is being made on a number of issues, including the conclusion of a new SME chapter that CME heavily influenced – which you can read about here – much work remains to be done on many critical and sensitive issues, including auto Rules of Origin, temporary entry of business professionals, procurement and supply management.

This stage in negotiations, while the timing is aggressive, is typically when negotiations begin to get more tense, and this is what is being reported from most stakeholders. The initial exchange of ideas and text of chapters has largely been completed, the general agreement on direction on many of the simpler items is in place, and negotiators are turning to specific details and more controversial issues. Despite what might be being reported in the papers, CME remains confident that an agreement can be reached to modernize NAFTA and support globally competitive manufacturing in Canada and across NAFTA.

Click here to read CME’s press release on the process to date.

 

Key Business Issues

A number of the priorities identified by CME and our member companies remain a work in progress in the negotiations. This includes procurement, temporary entry, red-tape reduction and dispute resolution among others. From a variety of sources, it appears that there is positive movement on modernizing customs and trade facilitation processes along the lines of the already agreed to TPP and embedding commitments to regulatory cooperation similar to the Canada-US Regulatory Cooperation Council. Temporary Entry (the movement of business professionals) is a key ask for Canada, and strongly supported by Mexico, is not as supported in the US by industry or government so progress remains slower. Government procurement, not surprisingly given US Buy American restrictions, is slow at this stage. Dispute resolution mechanisms do not appear to have been addressed in any meaningful way at this point. The Canadian government remains fully committed to reducing barriers and increasing access in all areas, including those mentioned.

Other areas that member companies have been asking about that the Government of Canada has been promoting include labour and environmental provisions. During this round we had a chance to meet with the Canadian negotiators on these files to get a better understanding of the government’s agenda and potential impacts on Canadian business. The direction received from negotiators was that the government was looking to create a competitive balance through the trade agreement on regulatory measures relating to these areas as part of Canada’s progressive trade agenda. They expected no impact at all on Canadian companies or operations as the requests fall in line with existing Canadian standards. It was also made clear that these areas would be part of the main NAFTA text (not as separate agreements) which means that other areas of the agreement would apply to them, including dispute resolution, and that these areas would not be meant to force specific standards or regulations on the other countries, but rather it would be a framework for long-term improvement in these areas.

 

Next steps

The next round of negotiations will take place in Washington, DC from October 11 – 16. CME will again be participating and representing the views of members. Before the next round, we will continue to meet with government officials to push your agenda and your issues. If there are issues that you have that you would like addressed, please feel free to send them to me. In addition, if there are specific questions on any issues, please feel free to contact me at any time. 

Thank you for your ongoing support of CME and our efforts to modernize NAFTA to strengthen your domestic operations and expand your customer base across the region. For more information please contact mb.info@cme-mec.ca

 

 

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