Trade experts gather in Detroit to talk NAFTA as negotiations resume
Rich Garton, CTV Windsor
Published Tuesday, November 14, 2017 5:30PM EST
Last Updated Tuesday, November 14, 2017 10:22PM EST
Round five of North American Free Trade Agreement negotiations is set to begin Wednesday, on the heels of a very contentious round of talks between Canada, the U.S.A and Mexico.
Experts believe proposed changes to certain provisions could have a major impact on jobs and the economy in Canada -- especially in border cities like Windsor.
Some of the leading trade experts in North America assembled in Detroit on Tuesday at a Canada-US Business Association luncheon, to talk NAFTA. The experts agree the deal needs tweaks to better reflect today’s trade environment – but not necessarily a major overhaul.
"It requires modernization, it requires some changes. I don't think that some of those have to be dramatic," says Edmundo Elias Fernandez, a trade lawyer and advisor for various Fortune10 companies.
Another theme they’ve picked up on: The re-negotiation process is becoming a bumpy ride.
"A lot of people actually liken what's going on in the NAFTA negotiation as negotiating the pre-nuptial agreement after you've been married for 30 years, which is uncomfortable," remarked Andrea Van Vugt, the Vice President of the North American Business Council of Canada.
Talks have become especially rocky after the last round, when the U.S. put some big proposals on the table that aren't considered favourable to the Canadian economy.
Many believe the major flashpoint proposal is a change governing the rules of origin in manufacturing.
The U.S. tabled a proposal to increase North American content requirements from 62.5 per cent to 80 per cent, with 50 per cent of that content originating in America.
Van Vugt says that would signal the death knell for manufacturing in Canada.
"A 50 per cent rule of origin of US content would essentially end the Canadian auto sector," Van Vugt said.
Another proposal would see an end to Canada's supply management system, allowing U.S. access to the Canadian dairy, eggs and poultry industries. It's another "non-starter" for Canadian negotiators.
"We have to worry about this being win-win-win, but every country has to make sure you get the best deal for your country," Van Vugt.
But if Canada's list of non-starters is too long, experts believe that could trigger a U.S. withdrawal from NAFTA.
President Donald Trump has publicly threatened to tear the agreement up if it's a bad deal for Americans.
"If president Trump decides to call for an ending of the agreement, what you're going to have, broadly, is uncertainty," says James Dickmeyer, a former U.S. Consul General in Toronto.
He says the uncertainty would spread from the investor to businesses and ultimately the consumer.
"It would be difficult to imagine ourselves without the agreement," Elias-Fernandez told CTV News.
All agree shredding the deal would be a worst-case scenario.
"To unravel NAFTA now would be very difficult, it would be hard on industry and it would cost," said Dickmeyer.
Van Vugt says there has been a lot of positive growth achieved through NAFTA over the past two decades – and to undo that would be devastating.
"It facilitates a lot of trade. It’s part of the bedrock of our trade relationship with the U.S., so if that goes away, that will be a real problem,” she said.
Round five of talks are scheduled to run Nov. 15 to 22.