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What to watch for if the NAFTA talks conclude

The CSCB will be working today to provide you with any NAFTA details, once there is official news of any or no agreement.

More than a year of negotiations might reach a breakthrough Friday, if Canada, the United States and Mexico agree on a rewrite of the North American Free Trade Agreement.

The talks, which kicked into high gear on Monday — when U.S. President Donald Trump said he'd struck a new, preliminary deal with Mexico — had reached a "very intense rhythm" by the end of the week, according to Foreign Affairs Minister Chrystia Freeland...

Here's what to watch for if a new, trilateral agreement is reached by Friday's deadline:

The cornerstones

The critical objective for all three sides has been a new chapter on the automotive sector, which represents about a quarter of NAFTA trade. Based on Monday's announcement, Canada's likely signing off on new rules for determining what vehicles and parts are eligible to avoid tariffs.  

A new agreement could ease uncertainty in North American supply chains, and dodge Trump's threat of car tariffs as high as 25 per cent — at least for those vehicles that comply. But analysts suggest that, even without punishing tariffs, cars will be more expensive in North America and its industry will be less competitive globally. 

At least two of NAFTA's dispute settlement chapters are on the table. 

Chapter 11, which allows companies harmed by arbitrary government actions to sue, was watered down in the agreement with Mexico. Canada might approve, or lobby to go further. Ottawa agreed to suspend similar investor-state dispute settlement provisions and pursue a permanent court-based approach in its trade deal with the European Union. 

Chapter 19, which allows companies who feel their imports have been unfairly hit with anti-dumping and countervailing duties to request NAFTA panel arbitration, is something the U.S. wants to scrap. Canada has been fighting to keep it...

Concessions to brace for

Trump has made it plain that American farmers must be able to export more to Canada.

The U.S. needs to export milk to deal with its chronic oversupply problem — one that Canada avoids with its strict production quotas. The dairy sector was said to be one of the last unresolved items as NAFTA talks continued into Thursday night. ..

Parts of the draft intellectual property agreement with Mexico — longer exclusivity periods for costly biologic drugs, or an extension of copyright terms to 75 years — could also be tough for Canada.

Plus, as any trade watcher will tell you: Prepare for the fine print...

This was excerpted from 31 August 2018 edition of CBC News.

Topic(s)

Trade Agreements

Information source

Canadian News Channel
Disclaimer

The foregoing information is provided for informational purposes only and is not intended as, nor should it be considered, professional advice or a substitute for conducting your own thorough research and review. Before making any decisions or taking any action based on the information provided, you should conduct your own independent investigation and/or seek professional advice from a qualified expert in the relevant field. The CSCB disclaims all liability for actions taken or not taken based on the information provided.