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February 5, 2018

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NAFTA needs major breakthrough to stay alive

Source: Xinhua | 00:01 UTC+8 February 5, 2018 | Print Edition

A major breakthrough is needed in the renegotiations of the North American Free Trade Agreement in order to keep the pact alive, says a Canadian trade expert.

“There has to be some type of announcement related to an agreement within a major sector,” said Michael Manjuris, a professor of economics and trade at Ryerson University in Toronto. “Maybe it will be the automotive sector because that seems to be the one we’re all talking about.”

Trade ministers from Canada, Mexico and the US have completed the sixth round of NAFTA negotiations in Montreal, with lead officials noting that some progress was made, but adding that tough challenges remain ahead of a new deal.

Something like a breakthrough in the auto sector “will have to come out in the next round to show that there is real progress and we’re not going to turn to a political fight in having (NAFTA) cancelled,” Manjuris said.

US Trade Representative Robert Lighthizer in his closing remarks after the weekend meeting said they took a step forward in this latest round, but he also criticized Canada for its recent launch of a challenge against US trade practices with the WTO.

He called the complaint “unprecedented” and a “massive attack on all of our trade laws,” according to Canadian news reports.

Canada’s government in December launched the wide-ranging 32-page complaint to the WTO, accusing the US of imposing unfair anti-dumping and anti-subsidy duties against Canadian products.

Canada said US broke the WTO’s Anti-Dumping Agreement, the Agreement on Subsidies and Countervailing Measures, the General Agreement on Tariffs and Trade, and the Understanding on Rules and Procedures Governing the Settlement of Disputes.

Manjuris said the complaint will have certainly sparked interest from other nations around world.

At the World Economic Forum in Davos, US President Donald Trump claimed success for his first year in office and said America remains open for business, resisting his apparent urge to exclaim his America-first protectionist rhetoric he has often repeated on US soil.

As for NAFTA, Manjuris said the negotiators are now getting into the tough elements of bargaining such as the auto sector, dispute settlement and rules of origin.

“The fact that they’re still talking tells me that both sides have been putting forward positions that are in some way trying to move them closer to an agreement,” he said.

The next round of talks will likely be held in Mexico in late February.

“Think about what they’re saying. They’re cautiously optimistic because they’re going to talk again,” Manjuris said. “That’s a pretty low bar.”

But there remains reason for optimism, he added, noting that several American business people, members of Congress and senators attended the Montreal meeting.

“They’re trying to push the idea that NAFTA is good for the Americans,” he said. “We’ve actually seen the participants in the agreement come forward and say this is important to us and we need to keep it.”

“At least they’re putting forth proposals to each other trying to get to move to some middle ground. That is a good sign,” he said. “It’s from now forward that we’re going to see the reality of whether NAFTA will be modernized and redeveloped, or whether it will be cancelled.”

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