How NAFTA becomes a bilateral deal in renegotiation


With the United States’ exit from the Trans-Pacific Partnership (TPP), the new administration says it’s focusing on bilateral agreements instead of multilateral deals in its attempted execution of an “America first” ideology on all things, including trade. Now that President Trump has formally notified Congress of his desire to renegotiate NAFTA, the countdown has started with negotiations beginning as early as mid-August.

In the meantime, Canada and Mexico have been taking the opportunity to get on the same page.

Just last week, Foreign Affairs Minister Chrystia Freeland was in Mexico, educating her Mexican peers on Canada’s strategy of wine and dine diplomacy and the use of data to drive their lobbying. The meeting appears to indicate the odds of Canada and Mexico throwing each other under the bus at the first sign of adversity during negotiations are lessening.

Hear my discussion on Agritalk last Friday on how the three countries are preparing for NAFTA renegotiation:

NAFTA is by definition a multilateral deal but there’ve been reports from Washington indicating the U.S. could approach negotiations in a bilateral fashion, with separate negotiating teams for Canada and Mexico, as Robert Fife reported in the Globe and Mail back in February:

Canada and the United States will focus on bilateral negotiations as part of President Donald Trump’s pledge to tweak the North American free-trade deal that governs Canadian commerce, leaving Mexico essentially to fend for itself.

Based on recent actions, it looks like Canada and Mexico might try to make it a de facto bilateral negotiation on their own terms, by teaming up, rather than allowing the U.S. to take a divide and conquer approach.

On Friday, I appeared on Agritalk and presented this concept to Jim Wiesemeyer of Informa Economics (listen to our conversation above). His response was “that would be a very smart game plan for Canada and Mexico, especially with the aggressiveness of the U.S. trade teams.”  Wiesemeyer continued “hopefully they (all three countries) find out again that this is a North American market with more advantages than disadvantages and then they will start talking in a positive framework.”

With President Trump, U.S. Trade Representative Lighthizer and Commerce Secretary Ross all saying they prefer bilateral deals, Canada and Mexico might agree, and use it as a negotiating strategy against them.


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