Canada, U.S. exchange barbs over NAFTA talks as stresses

OTTAWA (Reuters) – Canada and the United States

exchanged barbs on Tuesday over sluggish negotiations to update

NAFTA, reflecting mounting tensions over trade talks that appear

unlikely to conclude on schedule.

 

The talks have effectively stalled as Canada and Mexico seek

to address wide-ranging U.S. demands for changes to the North

American Free Trade Agreement. The early March deadline for

wrapping up the talks has been extended to at least early April,

officials said. But participants have said privately it could

take months longer than that.

 

Steve Verheul, Canada’s chief negotiator, told an Ottawa

audience that the United States aimed to weaken Canada and

Mexico rather than ensure that the $1.2 trillion trilateral

trade pact benefited all three members.

 

A few minutes earlier, U.S. Trade Representative Robert

Lighthizer pointedly said in Washington that talks with Mexico

over NAFTA were going well. He made no mention of Canada.

 

U.S. President Donald Trump frequently threatens to walk

away from NAFTA unless big changes are made. He blames the pact

for U.S. manufacturing job losses and his remarks about quitting

have unsettled financial markets.

 

Verheul said the talks had achieved little progress on major

issues so far and characterized U.S. negotiators as inflexible.

His comments were easily the gloomiest public remarks about the

talks yet by a Canadian official.

 

“The U.S. approach is to focus on the U.S. perspective only,

rather than a North American perspective. So they are looking to

strengthen the U.S. and by doing that weaken Canada and Mexico

within the North American economy,” Verheul told a conference

organized by the Canadian Global Affairs Institute.

 

Canada has made a number of what it calls creative proposals

to address the U.S. insistence that the North American content

of autos be raised. Washington also wants a clause that would

allow any NAFTA member to pull out after five years.

 

Verheul said a U.S. demand that would slash the amount of

government procurement contracts for Canadian and Mexican firms

“is the worst offer ever made by the U.S. in any trade

negotiation”.

 

Mexico has said the autos rule of origin would have to be

toughened, but gave no details.

 

Verheul declined to directly address Lighthizer’s comment,

telling reporters Canada would not walk away.

 

“We have no choice but to continue to … impress on the

U.S. that this cannot be a winner-takes-all agreement,” he said.

 

“It’s going to take a lot more time at the negotiating table

to try to grind through these issues.”

 

Last week, Canadian Prime Minister Justin Trudeau said

Canada “might very well be better off” not signing up to an

updated version of the NAFTA trade pact rather than accepting a

bad deal.

 

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