Negotiators are trying to ignore the politics and noise surrounding their attempt to update the North American Free Trade Agreement, but the big decisions will ultimately be made in the political realm.
And that means what happens on the ground in the negotiating room has to be within the range of what political leaders, including President Trump and the U.S. Congress, will accept.
While there was some progress in Ottawa this week, there are still questions being raised about how serious the U.S. is about getting a deal done, especially one that Canada and Mexico will view as an improvement over the status quo.
Given Trump’s history of trashing NAFTA and threatening to withdraw from the deal, the emphasis on America first, and the real challenge he faces in getting a deal approved by Congress, there’s a sense of uncertainty and ‘are we sure there’s a point to this?’ surrounding this NAFTA process.
It doesn’t help that the U.S. has not introduced formal proposals on the most controversial topics — the idea of a five-year sunset clause, product-specific rules of origin, currency, for example, and lower on that list, dairy.
“In those potentially most difficult areas, the U.S. has not yet tabled text, and so without a formal position tabled, we can’t respond to it,” said Canada’s Foreign Affairs Minister Chrystia Freeland on Wednesday.
And there are reports most of the proposals the U.S. has introduced have been met with strong opposition from Mexico or Canada.
So does the U.S. really want a deal? Is there growing frustration with the U.S.? Are the Americans deliberately putting non-starters on the table (for example, reportedly demanding an eight-fold increase in Mexico’s minimum wage)? Is the U.S. negotiating in bad faith? Freeland stuck to her optimistic script — that the process is moving very fast, and that she can only speak for Canada — when asked these questions in the closing press conference on Wednesday.
“I do not have the superpower that allows me to look into the heart of a counter-party and divine their true intention, so my approach is to put forward very sincerely, and professionally, proposals that reflect our national interests and national values,” she said.
The entire process is consuming a huge amount of government resources, as U.S. Trade Secretary Robert Lighthizer noted there were between 600 and 700 staff involved in the negotiations in Ottawa this week. If the deal isn’t going to go ahead, there are certainly other issues these people and their governments could be focused on.
As for agriculture, the 18-part text, which does not refer to supply management, seems to be one of the easier files for Canadian negotiators to work on, with all three countries agreeing they want to reduce regulatory obstacles. Canadian farm groups were optimistic about the progress made in Ottawa.
All three ministers noted they hope to overcome significant issues in the next round in Washington, but Mexico’s Ildefonso Guajardo stated bluntly that it will take serious commitment — a comment seemingly aimed at the U.S.
“As the negotiations move forward, it is important we have the will to table positions that encourage constructive discussions,” he said, during his closing statement.
Round four of NAFTA talks will begin in less than two weeks, October 11-15 in Washington, DC.
Watch Freeland’s closing press conference: