The North American Free Trade Agreement negotiations are continuing, with several contentious issues to work through. A Veteran international trade lawyer is questioning Washington’s NAFTA negotiating tactics and wants to warn American agriculture groups to keep a sharp eye on how things develop and progress.
Dan Ujczo is an International Trade and Customs Attorney for Dickinson Wright Law Firm in Columbus, Ohio. He specializes in Canada-United States trade matters, so he’s keeping an especially close eye on the NAFTA negotiations. There are seven rounds in the discussions, and he noted that the most aggressive positions on trade began to show up during Round 3. He’s worried about the tenor and tone of the Trump Administration during these negotiations.
“We saw the U.S. begin to put forth very aggressive proposals in Round 3 up in Ottawa,” Ujczo said. “The first one was on government procurement, also known as “Buy American,” which basically said the U.S. is going to cut back on the number of government contracts Canada and Mexico are allowed to procure. At the same time, the U.S. wants Canada and Mexico to allow more American participation in bidding on their government contracts.”
He said that’s when feathers first began ruffling. Round 4 saw some aggressive proposals on automotive rules-of-origin, which the U.S. wants to bump from 62 percent North American content to 85 percent. The Trump Administration wants 50 percent of that 85 percent number to come from North America. Ujczo said there are no free-trade agreements in the world that have a nation-specific rule-of-origin like that.
The Canadian supply-management program restricts the amounts of American dairy, poultry, and eggs that get into Canada. Ujczo said Canada’s called it a “red line” that they won’t cross. It’s something to keep an eye on as the U.S. negotiators have already come out against the supply-management system.
“The U.S. is also talking about a sunset provision, meaning NAFTA would automatically terminate after five years unless Congress reauthorizes it,” he said. “Those are things that will cause Canada and Mexico to carefully consider their next moves. There is a very real possibility that the U.S. knows that Canada and Mexico can’t negotiate on issues like that, which means we’re left with one conclusion.”
Ujczo said that conclusion is, in his mind, the U.S. NAFTA negotiating tactics may be designed to try and get Canada and Mexico to walk away from NAFTA. If they don’t, he said the Trump Administration very well could walk away by the end of this year. He feels the Trump Administration doesn’t necessarily want to walk away from the deal, rather, they’re more concerned about “making America great again.”
Here is the complete discussion. Is he right? Is he just being politically motivated? I didn’t get the sense he was. It felt more like a warning to American agriculture to keep making your voices heard.