U.S. trade representative Robert Lighthizer opened what may become one of the longest negotiations in recent memory, starting with an aggressive message that the United States is, in fact, looking for a large change to the treaty and its terms, in a large effort to minimize trade imbalances between the US and its two trading partners.
“I want to be clear that he is not interested in a mere tweaking of a few provisions and a couple of updated chapters,”
“We feel that NAFTA has fundamentally failed many, many Americans and needs major improvement.”
Most interesting Lighthize noted that the trade deficit in goods with Canada has exceeded $365 billion in the last 10 years.
Most bizarrely the NAFTA negotiations have also steered into potential disaster as key items like renegotiation on the dispute resolution mechanisms could see Canada leave the negotiation table early. This would be largely in dispute with what Mr Trump said in a phone call with Mexican President Enrique Pena Nieto in early January.
“Do not worry about Canada, do not even think about them. That is a separate thing and they are fine and we have had a very fair relationship with Canada. It has been much more balanced and much more fair. So we do not have to worry about Canada, we do not even think about them.”
Canada’s Charm Offensive
Although the American representative focused on just numbers, the Canadian Foreign Affairs Minister Chrystia Freeland began by displaying photographs of American and Mexican firefighters who have been dispatched to help fight the wildfires ravishing British Columbia. In many ways aiming to use the three nations long history of mutual cooperation to develop an equal deal rather than one that drastically benefits the Americans.
As discussions advance, one thing is clear though, the American delegation is simply larger and maintains far more power. Even in the number of items released(Canada released 10, the U.S. 100) the dynamic is lopsided. We hope that all nations begin to see this renegotiation as an opportunity to modernize an aging agreement, rather than aim for political points back home.
If that is possible, these nations could create an economic free trade zone that is equal to more than quarter of the worlds GDP, that is highly educated, and that is ultimately always ready for investment and growth.
What is your view, will these negotiations go well, or will one nation be left with far less?