Xinhua, Ottawa :
Canada could stand to gain more than lose from redrafted NAFTA, Colin Robertson, a retied Canadian diplomat who involved in the NAFTA negotiation in 1990s, said on Thursday.
Rules of origin, dispute settlement, softwood lumber and dairy products will be among the major items on the table when Canadian negotiators sit down with their American counterparts to begin renegotiating the 23-year-old North American Free Trade Agreement (NAFTA) in Washington, D.C. on Aug. 16.
In a document released last month, U.S. President Donald Trump’s administration stated that it wants to “update and strengthen the rules of origin…to ensure that the benefits of NAFTA go to products genuinely made in the United States and North America,” which could impact the automobile industry.
Currently, the rules require that a vehicle must have at least 62.5 percent North American content to gain duty-free access to the U.S., Canada and Mexico, which are part of NAFTA. Washington wants “the sourcing of goods and materials” in the supply chain to also remain on the continent, which could have an impact on automakers in Canada and Mexico that import vehicle components from other countries.
“If a part comes from abroad and gets converted into building, say, a carburetor, it gets counted as a Canadian or Mexican product even though the part may have been made in a country like China,” said Robertson in an interview with Xinhua Thursday.
Robertson expected the U.S. to push for raising the 62.5-percent threshold without much objection from Canada.
He said a more contentious issue will involve Chapter 19, a dispute-resolution mechanism within NAFTA that allows Canada and Mexico to appeal countervailing and anti-dumping duties imposed by the U.S. through independent tribunals rather than in U.S. courts.
The Americans want to eliminate Chapter 19 while the Canadians want to keep the tribunal provision, which has helped stave off challenges from the U.S. lumber industry against Canadian softwood lumber exports to the U.S.
However, softwood lumber was not included when NAFTA was first negotiated, and Canada and the U.S. have instead formed bilateral multi-year agreements, the last of which expired in 2015 and has led to a cross-border dispute over countervailing and anti-dumping duties, at a combined rate of about 27 percent, imposed by the U.S. on Canadian softwood imports this year.
Canada could stand to gain more than lose from redrafted NAFTA, Colin Robertson, a retied Canadian diplomat who involved in the NAFTA negotiation in 1990s, said on Thursday.
Rules of origin, dispute settlement, softwood lumber and dairy products will be among the major items on the table when Canadian negotiators sit down with their American counterparts to begin renegotiating the 23-year-old North American Free Trade Agreement (NAFTA) in Washington, D.C. on Aug. 16.
In a document released last month, U.S. President Donald Trump’s administration stated that it wants to “update and strengthen the rules of origin…to ensure that the benefits of NAFTA go to products genuinely made in the United States and North America,” which could impact the automobile industry.
Currently, the rules require that a vehicle must have at least 62.5 percent North American content to gain duty-free access to the U.S., Canada and Mexico, which are part of NAFTA. Washington wants “the sourcing of goods and materials” in the supply chain to also remain on the continent, which could have an impact on automakers in Canada and Mexico that import vehicle components from other countries.
“If a part comes from abroad and gets converted into building, say, a carburetor, it gets counted as a Canadian or Mexican product even though the part may have been made in a country like China,” said Robertson in an interview with Xinhua Thursday.
Robertson expected the U.S. to push for raising the 62.5-percent threshold without much objection from Canada.
He said a more contentious issue will involve Chapter 19, a dispute-resolution mechanism within NAFTA that allows Canada and Mexico to appeal countervailing and anti-dumping duties imposed by the U.S. through independent tribunals rather than in U.S. courts.
The Americans want to eliminate Chapter 19 while the Canadians want to keep the tribunal provision, which has helped stave off challenges from the U.S. lumber industry against Canadian softwood lumber exports to the U.S.
However, softwood lumber was not included when NAFTA was first negotiated, and Canada and the U.S. have instead formed bilateral multi-year agreements, the last of which expired in 2015 and has led to a cross-border dispute over countervailing and anti-dumping duties, at a combined rate of about 27 percent, imposed by the U.S. on Canadian softwood imports this year.
