Are NAFTA Talks in Trouble Before They Start?

Below is an interesting article on the upcoming NAFTA talks by WSJ.

I wondered out loud in this space a couple of weeks ago about whether the soft wood lumber dispute would be part of the General NAFTA talks or a separate issue. It was unclear at the time from statements made by authorities. Well, apparently talks have been underway on the softwood lumber issue separate from the upcoming NAFTA talks and there was a desire to have them concluded before the formal NAFTA talks began . However, Canada is now pouring cold water on having a soft wood deal in advance. This , of course will complicate matters substantially and throwing soft wood lumber in with the rest of the items to be negociated will lead to making the process even more of a mess than it already seems to be. For example, it seems Canada was willing to give on the Marketing Boards for dairy but with no agreement on lumber this concession could be more difficult to sustain.

WSJ
By Paul Vieira
Aug. 7, 2017 10:22 a.m. ET

OTTAWA—

Canada on Monday played down the prospect of a resolution with the U.S. over a trade spat on lumber imports before the start of talks to revamp the North American Free Trade Agreement, denting enthusiasm raised by Prime Minister Justin Trudeau last month for such an outcome.

The inability to cut such a deal before the start of the renegotiations, set to formally start on Aug. 16, threatens to add another layer of complexity in efforts by the U.S., Canada and Mexico to find common ground on a new continental trade pact, Canadian lawmakers and trade watchers have warned.

Talks are aimed at settling the latest chapter in a decadeslong trade dispute between Washington and Ottawa over Canadian softwood lumber, which is mostly used to build houses.

Canadian Foreign Minister Chrystia Freeland told reporters in a teleconference from the Philippines on Monday that “she was unable to predict when we might reach an agreement.” She said talks continue, adding she and U.S. Commerce Secretary Wilbur Ross have been “actively, energetically and substantively engaged” for the past two months.

She didn’t elaborate on what is dividing the two countries. “I do think an agreement which benefits both Canada and U.S.…is absolutely possible and achievable, and I can see the outlines of that agreement already.”

Last month, Mr. Trudeau said both the U.S. and Canada expressed a desire to settle the softwood dispute before the start of Nafta negotiations. “We are going to work very hard towards that,” Mr. Trudeau said at a meeting of U.S. governors in Rhode Island.

In April and then again in June, the Trump administration slapped duties on Canadian softwood lumber, reaching as high as 30% on some products. The U.S. accuses Canada of unfairly selling its lumber in the U.S. at prices below production costs, and providing subsidies to its producers. The Canadian government has repeatedly said there is no merit in the U.S. accusations.

In 2016, the U.S. imported over $5 billion worth of Canadian softwood lumber.

Mr. Ross has said the decadeslong disagreements over softwood lumber illustrate the shortcomings of Nafta.

Trade lawyers and Canadian politicians said it was crucial that a settlement be reached before the start of Nafta talks. “We need to get it off the table, so Ms. Freeland and federal officials can focus on the larger challenge of the broader trade agreement,” said John Horgan, premier of British Columbia, the west-coast Canadian province that produces the bulk of softwood lumber exported to the U.S.

Write to Paul Vieira at paul.vieira@wsj.com

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One thought on “Are NAFTA Talks in Trouble Before They Start?

  1. So the US says Canada sells the softwood lumber below production costs! That sounds hardly cost-effective if you’re in the business of remuneration.
    Canada says that is not true……surely the figures on all this must be readily available to resolve this sticking point.

    Does Canada provide subsidies to the producers???? That should be readily available too.

    We’ve all heard of this “softwood problem” for decades – let’s hope common-sense can resolve the issue.

    Like

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