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Canada鈥檚 NAFTA waiting game enters new week as US and Mexico work on differences

The federal government insists it hasn鈥檛 been frozen out of the talks
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(The Canadian Press)

The hurry-up-and-wait uncertainty surrounding Canada鈥檚 return to the NAFTA talks is entering a new week as Ottawa鈥檚 partners in the trilateral deal push forward with their one-on-one negotiations.

For five weeks, top officials from both the United States and Mexico have logged many hours of face-to-face talks in Washington on the North American Free Trade Agreement. With signs of progress apparent, the high-level American-Mexican meetings stretched through the weekend.

But even with brightening prospects, Ottawa has remained absent from summertime discussions on a continental pact that鈥檚 deeply important for the Canadian economy. A timeline for Canada鈥檚 return to the table has yet to be mapped out.

The federal government insists it hasn鈥檛 been frozen out of the talks, and Foreign Affairs Minister Chrystia Freeland said she鈥檚 been in regular contact with both her counterparts, U.S. Trade Representative Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo.

Canadian officials have argued the bilateral period has been necessary for the U.S. and Mexico to sort out tough issues such as rules of origin for autos.

But trade experts say Canada鈥檚 omission is 鈥 at least in part 鈥 a tactic by the White House to divide and conquer as it applies extra pressure on Ottawa to accept what could be a less-palatable deal.

Peter Clark, a veteran Ottawa-based trade lawyer, said the U.S. is letting Canada cool its heels in what he calls a unique approach to negotiations.

鈥淚t鈥檚 not unusual to have bilateral sessions, but not to this extent,鈥 said Clark, who considers a Lighthizer a good tactician.

鈥淚t鈥檚 an Ambassador Bob special.鈥

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Derek Burney, a former Canadian ambassador to Washington, agrees that keeping Canada away from the table in recent weeks is part of the U.S. strategy.

鈥淐rude and rude to be sure. But not necessarily damaging,鈥 Burney wrote in a brief email, adding that Canadian officials 鈥渨ill have to wait and see, while holding our ground without flinching.鈥

Ohio-based trade lawyer Dan Ujczo said the bilateral U.S.-Mexico talks are necessary because the two countries鈥 one-on-one issues are more significant at this point in the year-long negotiations 鈥 but he added that leaving Canada on the sidelines has an added effect.

鈥淚 think it was just a negotiating reality, but there鈥檚 no question in my mind that it was designed to impose maximum leverage 鈥 as any negotiator would,鈥 said Ujczo, who works for the law firm Dickinson Wright.

For several weeks, Canada鈥檚 team has been expected to rejoin the talks in Washington, but its anticipated return has been delayed and it remains unclear when it will be invited back.

Even when Canada is asked to rejoin, its negotiating team might have to begin without Freeland. She鈥檚 on a diplomatic visit to Europe until Thursday, with stops in Germany, Ukraine and France.

Clark said there are expectations Freeland will return to Washington on Friday. From there, he thinks Lighthizer might hold separate bilateral talks with both Canada and Mexico before restarting trilateral discussions that have been on hold since the spring.

鈥淚t鈥檚 not a negotiating style. He鈥檚 just trying to get everything he can out of each side and he prefers to do that one on one,鈥 Clark said.

There are also concerns Canada鈥檚 two NAFTA partners have gone much deeper into trilateral issues during Ottawa鈥檚 absence.

Over the weekend, Reuters reported that Jesus Seade, the chief negotiator for Mexico鈥檚 incoming government, said the U.S. had softened its demands for the inclusion of a so-called 鈥渟unset clause鈥 within NAFTA. Canada has flatly rejected the addition of a sunset clause, which would see NAFTA renegotiated every five years.

On Sunday, a Canadian government official, speaking on condition of anonymity because of the sensitive nature of the talks, said any U.S.-Mexico agreements on matters that concern all three countries would still require Canada鈥檚 signature.

Prime Minister Justin Trudeau said last week that his government 鈥渨ill only sign a good deal for Canadians.鈥

Meanwhile, U.S. President Donald Trump has made efforts to amplify the pressure on Ottawa.

He suggested earlier this month that his administration had deliberately iced Canada out of the NAFTA talks. On Saturday, he said the U.S. 鈥漴elationship with Mexico is getting closer by the hour鈥 in a tweet that made no mention of Canada.

鈥淎 big Trade Agreement with Mexico could be happening soon!鈥 Trump tweeted.

Some say the White House is also feeling some heat to strike a deal.

Ujczo said because of political and procedural hurdles on the horizon in the U.S. and Mexico, the coming week will be crucial for NAFTA鈥檚 renegotiation. He believes the White House will want to lock down a deal soon to ensure it鈥檚 completed before the incoming Mexican government takes office on Dec. 1.

鈥淭here is a very short window to close this deal and claim victory, and it鈥檚 an important political priority for the president,鈥 he said.

鈥淭he negotiator-in-chief needs to show he can close a trade deal.鈥

Andy Blatchford, The Canadian Press


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