For five weeks, Canada has watched from the sidelines as the U.S. and Mexico hammered together a revised free-trade deal.
Now this country may have less than five days to become part of that new agreement, one that is likely to shape the Canadian economy for years.
President Donald Trump announced a new trade pact with Mexico on Monday, said it would be sent to Congress for review this Friday, and suggested Canada has until then to negotiate its way into the accord – or face stiff tariffs on auto exports.
Many experts say Trump can’t actually proceed without Canada’s participation, but political pressure seemed to be mounting for an agreement by the end of the week...
Meanwhile, the new U.S.-Mexico deal calls into question the notion promoted by Canadian officials that the other two countries were discussing solely “bilateral” issues, like the content of automobiles exported duty-free into the U.S.
In fact, the agreement also includes extensive provisions for boosting protection of intellectual property, some of which would force Canada to change its current laws if it signed on. An increasingly important class of drugs, for instance, would require an extra two years of protection from generic competition...
... U.S. law requires 90 days of review by Congress before the administration can formally sign a trade accord, which makes Friday, the last day of August, the unofficial deadline...
As expected, the deal they shook hands on requires that 75 per cent of autos traded duty-free under NAFTA be made in North America, and that 40-45 per cent be built by workers paid at least $16 an hour – far more than the average pay in Mexico now.
Those and other aspects of the auto agreement should be welcomed by Canada, which had actually proposed some of the elements earlier...
And the two countries have chiseled out a compromise on the U.S. demand for a sunset clause, which would have required the deal to be re-approved every five years. Canada said that would kill long-term investment. Instead, NAFTA would be reviewed every six years and, if all countries agreed, extended by another 16 years, a senior administration official said Monday...
This was excerpted from 27 August 2018 edition of the National Post.