OFA: Where Does Canada Go From Here In NAFTA Negotiations?

By Keith Currie

Canadian agriculture and our trading opportunities are in a very precarious position as trade negotiations between Mexico and the U.S. appear to be moving forward. It’s an extremely unfortunate situation for our industry and our country, as Mexico appears to have caved under the undoubtedly heavy handed approach of the U.S. These latest negotiations excluded Canada – even though we are a much more significant trading partner.

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For the past many months, Canada has been at the table in an attempt to negotiate a new trilateral trade agreement with the U.S. and Mexico – to replace the 24-year old North America Free Trade Agreement (NAFTA) that U.S. President Trump believes is grossly unfair…only for Americans.

Mexico and the U.S. have recently agreed in principle to a new bilateral U.S./Mexico Free Trade Agreement. The basic content of the agreement was released in statements this week by the Office of the United States Trade Representative. The deal is far from done but the fundamentals are there.

The vaguely worded agreement includes new provisions between the U.S. and Mexico that cover trade in several manufacturing sectors, and its release included a document entitled “Strengthening NAFTA for Agriculture” that states “while agriculture has generally performed well under NAFTA, important improvements in the agreement will enable food and agriculture to trade more fairly.”

These are the details that catch the attention of Canadian negotiators as they scramble to understand the deal to determine if the terms are acceptable to Canada as part of a new NAFTA framework. Canadian trade interests will also need to be incorporated.

For the first time, the U.S./Mexico agreement specifically addresses agricultural biotechnology – with the two countries agreeing to enhance information exchange and cooperate on ag biotech trade-related matters. Another first is an agreement by the U.S. to not restrict market access in Mexico for certain U.S. labelled cheeses. Likewise, whiskey and tequila will be recognized as distinctive products with no market restrictions to the U.S. from Mexico.

Canada, on the other hand, is clearly in a game of catch up. It’s critical for Canadian negotiators to dig into the details to quickly understand and adapt the U.S./Mexico agreement to secure the continuation of a truly North American trade agreement. The markets of our three countries are integrated to such a degree and level of complexity that multiple bilateral agreements would be confusing and costly. The Ontario Federation of Agriculture urges the Government of Canada to secure a new NAFTA that protects the interests of Canadian farmers, food processors and manufacturers. A trade deal without supply management is a deal breaker for Canadian agriculture.