Canada Reaches Deal With The U.S. That Will Replace NAFTA

Oct 1, 2018
Originally published on October 1, 2018 10:43 am
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RACHEL MARTIN, HOST:

After weeks of intense negotiations, Canada has joined the new NAFTA. The U.S. and Mexico brokered changes to the trade deal back in August, and the Trump administration gave Canada until midnight to agree to the deal. President Trump is set to deliver remarks about the agreement later today. The administration is framing this as a win for the Trump playbook on trade, forcing even America's closest allies to re-examine trade agreements to win better terms for U.S. workers. Whether or not Congress will agree and ratify the deal is another matter. Christophe Bondy is on the line to talk to us about what we know so far. He was Canada's senior counsel in the trade deal Canada signed with the EU last year. Thanks so much for being with us.

CHRISTOPHE BONDY: Thanks. Glad to be here.

MARTIN: Last night, Prime Minister Justin Trudeau spoke briefly to reporters after a late-night cabinet meeting. This is what he said.

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UNIDENTIFIED REPORTER: Prime Minister, what can you tell us about the deal?

PRIME MINISTER JUSTIN TRUDEAU: It's a good day for Canada.

MARTIN: A good day for Canada, Trudeau said. Is it? Do you agree?

BONDY: Yes. I think so. I mean, in the first place, it removes a great deal of uncertainty that's been floating over the NAFTA, which is the fundamental trade agreement for the U.S., Canada and Mexico. It's been floating over that agreement for the last two years. And based upon early reports of what's been agreed, Canada got pretty much what it was looking for in terms of this update. It has the Chapter 19 review, bi-national review of anti-dumping countervailing duty. It has gotten rid of this guillotine clause which is going to say that the agreement would terminate after five years. It's retained its cultural exemption, it's retained state-to-state dispute settlement and it also has enhanced environmental and labor protections, all of things Canada was looking for. In terms of the give on dairy, I think - and still it's really days to see, but it seems to be little more than what Canada had already proposed to the U.S. in the context of the CPP negotiations.

MARTIN: We should just note this was something President Trump was very animated about. He wanted the U.S. to have greater access to Canada's dairy market. The Trump administration is framing this as a victory, saying that the U.S. has greater access now, even greater access than it would have gotten under the Trans-Pacific Partnership. You're saying that's not necessarily the case?

BONDY: Well, I think there appears to be somewhat better access, but I'm not sure how much more it would have been than TPP. In any event, I think the important thing is that this is a positive outcome for all three of the NAFTA parties, and they can go forward on a more stable basis. Another thing for Canada in this was securing some continued access in terms of automotive trade.

MARTIN: Although Canada is not pleased with the Trump administration's tariffs on steel and aluminum, and those are still in place. Is that a disappointment?

BONDY: Well, that's right. The steel and aluminum tariffs that were imposed on national security grounds against Canada, your closest security partner, leading to proportionate responding tariffs by Canada on a wide range of U.S. products. They remain in place, but the thing is, you can't deal with all issues at the same time. So that is a separate dispute. Canada has brought proceedings about those measures, as have a number of countries, suggesting that they are not justified. So that remains to be settled another day. But in any event, it is helpful that we have achieved - and I congratulate Minister Freeland and Steve Verheul, who's counted as lead negotiator on this agreement, for having stuck to their guns and come through with what appears at first look to be a great outcome.

MARTIN: It's not at all given that Congress is going to sign this, though, especially with uncertainty over the mid-term elections in November. Does Canada have a Plan B?

BONDY: Well, the NAFTA 1.0 is still in place. So I think there's more chance that Congress is going to sign this because it actually corresponds with the negotiating authority that the president was given that is for a trilateral deal. I mean, don't forget the context of which Canada was negotiating this with the U.S. is the U.S. president had said that he was going to update the NAFTA and so needed to get a deal from that point of view, and also didn't have authority to do bilateral. So this has much more greater chance of getting through.

MARTIN: Christophe Bondy. He was Canada's senior legal counselor in the trade deal signed with the EU last year. Christophe Bondy, thank you so much for your time.

BONDY: Thank you. Transcript provided by NPR, Copyright NPR.