Canada to Fight for Continuance of NAFTA Binational AD/CV Panels, Against US Wishes

The Canadian government is approaching the first round of NAFTA renegotiation Aug. 16-20 with the intent of maintaining the Chapter 19 binational antidumping and countervailing duty dispute settlement process, Canadian Foreign Affairs Minister Chrystia Freeland said on Aug. 14, teeing up a potential clash with U.S. negotiators as talks start. During a speech in Ottawa, Freeland reminisced on when Canada’s chief negotiator of the U.S.-Canada Free Trade Agreement “walked out” over the binational AD/CV duty panel process in 1987. “Our government will be equally resolute,” Freeland said. “Just as good fences make good neighbors, strong dispute settlement systems make good trading partners.” The Office of the U.S. Trade Representative didn’t comment.

The USTR NAFTA renegotiation objectives include the elimination of the binational panel mechanism (see 1707180022). “These talks are consequential,” Freeland said. “There may be some dramatic moments ahead. Yet I am deeply optimistic about the final outcome. That is because of this fundamental reality: The Canada-U.S. economic relationship is the most significant, the most mutually beneficial and the most effective anywhere in the world. We know that. And, particularly after six months of constant reminders from their friends in the North, our American neighbors now know it, too.”

Freeland added that Canada hopes NAFTA will adopt reformed investor-state dispute settlement (ISDS), strong labor safeguards in core text, and provisions that support efforts to address climate change and prevent weakened environmental protection to attract investment. Canada hopes to reform ISDS “to ensure that governments have an unassailable right to regulate in the public interest,” Freeland said. The nation also hopes a new agreement will cut red tape, harmonize regulations, and open up government procurement. “Local-content provisions for major government contracts are political junk-food, superficially appetizing, but unhealthy in the long run,” Freeland said. “Procurement liberalization can go hand-in-hand with further regulatory harmonization.” Canada also wants new chapters for indigenous peoples and gender rights, “in keeping with our commitment to gender equality,” she said.