- Jul 31, 2021
Canada and United States’ negotiation to revamp NAFTA appeared to stumble on concessions over agriculture. The main reason being, the negotiators failed to meet US President’s demands. U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland resumed talks on Friday, with Mexico still on standby. Lighthizer remained firm on his decision over some dairy concessions to maintain an independent trade dispute mechanism in NAFTA. However, Canada had made no concessions on agriculture, which includes dairy.
So the negotiation is still going on. Trump’s point is Canada’s tariffs are hurting U.S farmers, the group from which a lot of support comes for his Republican party. But the dairy farmers have a lot of political power in Canada too and if Canada decides to budge, it could result in a disastrous result for the Liberals. Mexico has agreed to meet U.S’s demand to eliminate chapter 19, the dispute-resolution mechanism that has hindered it from pursuing anti-dumping and anti-subsidy cases. A bilateral deal announced by both the United States and Mexico has given rise to hopes of a new NAFTA. This new NAFTA is likely to strengthen North America as a manufacturing base by making it more costly for automakers to import a large share of vehicle parts from outside the region.
Trump promised more jobs for the Americans as a part of his campaign propaganda and the new chapters governing the digital economy and stronger intellectual property, labor and environmental standards could also work in favor of the U.S companies. Juan Pablo Castanon, head of the umbrella group representing Mexico’s private sector in the NAFTA talks, said, “Today the meetings will be trilateral looking at scenarios to conclude the talks. Details on an agreement are still missing.”
This negotiation has somewhat made an impact on the global trade stocks as they were weaker for a second day on Friday following Trump’s threat to withdraw from the World Trade Organization. MSCI’s gauge of world stocks.MIWD00000PUS was down 0.5. The dollar was stronger on the day, and the Canadian dollar was off by more than half a percent for the second straight session. However, Trump’s deadline to come to an agreement would allow Mexican President Enrique Pena Nieto to sign it before he leaves office at the end of November.