Six Steps: Forward, Backward, Or Marching In Place?

The week of January 22, Canada hosted the sixth round of NAFTA negotiations in Montreal, continuing a process of discussions rotating among the three countries. I had the privilege of participating in some side events in Montreal that week, involving major chambers and business organizations from Canada, the U.S., and Mexico. It was a great opportunity to continue our collaboration with our Quebec friends, including the Chamber of Commerce of Metropolitan Montreal, and to reconnect with many leading figures such as Gordon Giffen, a former U.S. Ambassador to Canada with Plattsburgh roots who had visited us while in Ottawa and who has remained a respected voice in U.S.-Canada relations.

Round six began with predictions by pundits landing all over the map: That it would prove to be a final step before a notice of withdrawal by President Trump. That, to the contrary, there would finally be some acceleration in the face of looming elections later this year in Mexico as well as the mid-term elections in the U.S. One could find voices of pessimism that the U.S. was being unbending in such matters as the continuation of a dispute resolution process, or that the atmosphere was poisoned by Canada’s continued push behind social and political agendas not directly related to trade and its recent initiation of a massive action against U.S. trade practices through the World Trade Organization (WTO). Or one could hear voices of optimism, that the stakes are simply too immense for failure and that, aside from occasional public voices, the actual teams at the table were sensing more progress than generally assumed. One could take one’s pick of prognostications from a veritable buffet of opinions.

In the end, the most important thing is that the mission continues post Montreal.
Unlike the historic Apollo mission, which saw us land men on the moon six times, only to never return thereafter, the renegotiation of NAFTA will see a seventh session and the traveling conclave of negotiators, bureaucrats, Congressional and business observers, media, and others will re-gather in Mexico City on February 26. And then Round Eight is set for Washington, D.C., in March.

The general impression is that progress was made on several items, even if only introducing some approaches to thorny issues that were at least not dismissed. The parties believe that U.S. goals are clearer. And there seems greater optimism than existed at the end of 2017.

Robert Lighthizer, U.S. Trade Representative and a self-described curmudgeon, basically highlighted three U.S. priorities at the conclusion of the Montreal talks:
• The reduction of trade deficits. Note that the U.S. actually has a trade surplus at present with Canada, but different interpretations are being implied so as not to wholly accept this. Plus, of course, it is the total growth in binational commerce that truly matters versus the relative “balance” at any point. Nevertheless.
• A desire for speedier progress, reflecting expressed frustration with the pace so far.
• Maintaining regional protections against trade challenges and practices from elsewhere, with China mentioned specifically. A sustained and modernized NAFTA, of course, has as one of its greatest values the enhancement of North American competitiveness globally.

It was also clear from the grumbles that the U.S. was very taken aback by the WTO case brought against the U.S. by Canada, in spite of highly aggressive actions by the U.S. on behalf of Boeing, for example, and against Canadian paper. Reading between the lines, however, the Canadian WTO complaint might, potentially, become a bargaining topic. We will see.

And so, unlike Apollo, there will be a seventh and likely eighth event in search of a modernized and renewed NAFTA. And the North Country will continue to have more reason than most in North America to watch closely and do what it can to support appropriate messaging as the process continues.