As Deadline Nears, New NAFTA Not Ready For Signing
Above photo: U.S. President Donald Trump and Prime Minister Justin Trudeau, seen here at the G7 leaders summit last June, will both be at the G20 summit in Argentina this weekend. (Leah Millis/Reuters)
Trump’s economic adviser says revised NAFTA deal to be signed Friday in Argentina
NOTE: This article indicates that the new NAFTA is still on shaky ground. The text has not been finalized with only a few days to go. This makes our work to stop it even more urgent. We need to demonstrate that no more rigged corporate trade agreements will be allowed to be ratified. We want a new model of trade that raises wages and improves working conditions and that protects the environment and strengthens actions to mitigate climate change. We call this trade for people and planet.
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Three days away from the target date for all three countries to officially sign the revised North American trade agreement, Canada and the United States are still haggling over what the deal actually says.
An annex on duties Canada imposes on U.S. dairy, egg and poultry products that was posted online by the Trump administration contained language that differed from what Canadian negotiators believed they’d agreed to at the table. Confronted with the discrepancy, the American side stuck to its guns.
The clock is ticking down fast: Nov. 30, the intended signing date, is this Friday.
“Discussion around and work on the signing is ongoing,” wrote Foreign Affairs Minister Chrystia Freeland’s spokesperson Adam Austen today, promising more details when things are finalized.
U.S. President Donald Trump and Prime Minister Justin Trudeau are expected to be in Buenos Aires, Argentina for the meeting of G20 leaders scheduled for this weekend.
Larry Kudlow, Trump’s economic adviser, told a press briefing at the White House today that U.S. and Canadian “representatives” would sign the deal in Argentina.
But more details have not been forthcoming, particularly from the Canadian side. Previous major trade agreement signings were confirmed earlier than this.
It’s not clear who will sign this deal on Canada’s behalf. Under current circumstances — with U.S. steel and aluminum tariffs not yet lifted on Canada and Mexico as anticipated — Trudeau may not be inclined to give Trump a celebratory photo opportunity.
Canada’s ambassador to the U.S., David MacNaughton, quipped to Politico earlier this fall that perhaps a low-ranking Canadian official with a bag over his head would be best person to pick for the official signing.
Today’s White House press briefing also listed five world leaders Trump would meet with one-on-one during the G20. Trudeau was not among them.
The race to reach an agreement earlier this fall was premised on two things happening.
First, in order for outgoing Mexican President Enrique Peña Nieto to participate in the official signing ceremony, it would have to happen before his successor is sworn in on Dec.1.
Second, the Americans had to post the text of the agreement online 60 days before signing it, if the Trump administration wanted the trade deal to be eligible for “fast-track” passage through Congress. Fast-track passage allows no amendments during committee review stages and permits only a final up-or-down vote.
The agreement was announced on the evening of Sept. 30 — just in time — after a hectic final weekend of talks between the Canadians and the Americans.
The first step in any signing ceremony is for the parties to agree on what they’re signing.
While an English version of the United States–Mexico–Canada Agreement was published by the United States Trade Representative’s office by Oct. 1, as required by Congressional fast-track rules, Canada has never published its own version of the text.
The text also hasn’t been officially translated to allow francophones to read the details in their first language.
The only link to the full text available on the Global Affairs Canada website links to the USTR’s website.
Although the website refers to the ‘USMCA’, it’s not clear that Canada is completely on board with renaming NAFTA; Trump appeared to unilaterally come up with with title during a media appearance earlier this year. Freeland, for example, said last week that in Canadian documents it’s called “CUSMA”, putting Canada first, so she prefers to call it “the new NAFTA.”
So there’s new NAFTA, USMCA, and CUSMA. All of that.
— Katie Simpson (@CBCKatie) November 21, 2018
Once the text is signed by the three leaders, or their designated ministers or officials, it becomes an official commitment of their governments. A detailed legal scrub has been underway for the past two months to make sure the text being signed reflects exactly what Canadian negotiators agreed to at the table.
And not everything the USTR posted online was what Canada expected.
In particular, Annex 3-B (Agricultural Trade between Canada and the U.S.) — which set out notification requirements for Canada should it want to change tariffs for its supply-managed dairy, poultry or egg industries — did not reflect what negotiators believed they had approved during the talks.
According to the American version, the Canadian government would need to notify the U.S. whenever it makes any changes to customs duties on these products before those changes are finalized, allowing American officials to review the decision and request more information.
While there have always been ways for the U.S. to respond to Canadian duties it finds unjust (by launching arbitration cases before the World Trade Organization, for example), the American USMCA text raises a sovereignty concern. It appears to interfere with Canada’s ability to make its own tariff decisions and administer its system as it sees fit.
The affected industries were told not to worry — that the issue would be resolved before the final signing.
CBC News has been told that, as of Tuesday, Canada and the U.S. have not settled on mutually agreeable language.
Officially, all the government will say is that the legal scrub continues. And it’s not clear what might happen if the two sides cannot bridge their differences by Friday.
A signing ceremony does not signify that the deal is ratified and ready to take effect. The U.S. Congress has a lengthy ratification process, for example. The outcome of that process for USMCA is far from certain, particularly given the election of a Democratic majority in the House of Representatives earlier this month.
Congressional leaders recently confirmed that the existing U.S. Congress will not vote on the USMCA during its “lame duck” session between now and the end of the year.