NAFTA Update: U.S and Canada Negotiate

NAFTA Negotiations with U.S and Canada Still Up In The Air

It was reported that the negotiations of the North American Free Trade Agreement (NAFTA) would remain open for another 90 days. This is with the “hope” that Canada will remain a part of the deal, reports Linkedin.

A No-Canada NAFTA? 

On the contrary, U.S President Trump has continued to threaten to leave Canada out of a new trade agreement already negotiated with Mexico. This threat is to the dismay of many who warned that this is not an easy out. Former U.S Treasury official Mark Sobel told Bloomberg, “Canada’s the main trading partner for many states, quite a bit of our economic fortune’s are intertwined with Canada.”

The negotiations along, with a newly proposed roll-out of new tariffs at the tune of $200 billion of Chinese goods, has government officials increasingly worried. And not surprisingly, Bejing said they would “retaliate.”

Issues of the Deal

Despite abysmal headlines and political commentary, Canadian and U.S negotiators stress that progress is happening. The sensitive topics right now is that of the international dairy market and the dissolution of Chapter 19. Chapter 19 is a dispute-resolution clause that provides the space for NAFTA members to challenge trade rulings in front of an independent panel.

The dairy industry may seem innocuous to the naked eye. But, Canada limits dairy imports and imposes steep tariffs of more than 200% on products that exceed those limits, which the U.S believes violates the free trade agreement. Jon Johnson, a senior fellow at Toronto-based C.D. Howe Institute and former government trade negotiator, broke down the issue to The Wall Street Journal. He explained that without restrictions, “our dairy industry would probably be wiped out,” he said. “The state of Wisconsin could easily supply all of Canada’s needs.”

Although, it gets tricky as a collapse of NAFTA would be detrimental to the Canadian economy. These stipulations continue to put mounting pressure to bend to U.S demands. President Trump is also facing pressure on the other end not to pursue the trade deal without Canada. A bi-partisan group of government officials will not back him in that decision. The private sector said the same, as both U.S businesses and farms are supporting a NAFTA with our Northern neighbor.

Author: Christine Duff

Christine wants to live in a world filled with cutting edge fashion, beautiful words and and an endless supply of leather jackets and boots. A product development grad of FIDM, she was the Editor-in-Chief of MODE Magazine where she reignited her love of storytelling. She has diverse experience within the industry with trend research, art direction and styling editorial spreads. She gained her most notable experience working in Los Angeles at the satellite operation for GQ and Vogue Thailand. Christine is passionate about social science and the role it plays in the consumer goods industry and apparel in particular.