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US lays out goals for North American Free Trade Agreement

Toronto Star | Jan 15 2014

U.S. lays out goals for North American Free Trade Agreement

Twenty years after NAFTA rolled out, the U.S. lays out its objectives for the regional trade pact in hopes of improving job prospects across continent.


WASHINGTON—Twenty years after free trade began remapping the North American economy, the U.S. insists it is open to a sequel aimed at improving job prospects across the continent.

Yet the shared goal of a NAFTA 2.0 that wins fresh, sustainable gains for Canada, Mexico and the U.S., the Americans warn, is unlikely to come in a single, dramatic and easily digestible sound byte.

Instead, the Americans are urging a more realistic approach aimed at reviving trilateral momentum, with a dogged diplomatic effort that aggressively fine-tunes, streamlines and expands the trade pact to benefit all.

“Frankly, 20 years after NAFTA, is there really a second act as innovative, as creative, as risk-taking, as bold?” a senior U.S. official said in a background briefing for reporters focused on North American issues.

“It’s hard. Really hard. What’s the second act? The other part of the challenge is . . . sound bytes. You’ve got to figure out a way to make people understand what we’re trying to do. So when we’re talking about trying to improve regulatory co-operation, that’s great. Now tell me what that actually means?”

The rare glimpse into the U.S. position on NAFTA came Wednesday as a curtain-raiser for an upcoming flurry of North American diplomacy. On Thursday, Canadian Foreign Minister John Baird is set to deliver Canada’s perspective in a speech to the U.S. Chamber of Commerce headquarters in Washington before meeting Friday with his U.S. and Mexican counterparts.

The mini-summit, in turn, sets the stage for another Three Amigos Summit Feb. 19 in Taluca, Mexico. It’s the first such leaders meeting in two years for a continental trading bloc that critics say has suffered from neglect as Washington fixes its gaze on other forums, including the ambitious and controversial 12-nation Trans-Pacific Partnership talks.

Friday’s trilateral meeting, however, involves a rare encounter with U.S. Secretary of State John Kerry, who will turn his attention to North America after 10 thus far fruitless trips to the Middle East aimed at reviving the Israeli-Palestinian peace process.

Kerry signalled in December an interest in deepening and broadening NAFTA, telling the Miami Herald the pact might one day include the rest of Latin America.

“It’s something I actually have asked some folks to explore,” said Kerry. “And they’re very encouraging about it, so we’re going to try to do our due diligence on this and I’m really hopeful.”

But a source familiar with U.S. policy told the Star Kerry’s remarks on a bold sequel to NAFTA were “totally off the leash. They weren’t vetted, he was just freelancing. He appears to have written a cheque with those words that the U.S. is not quite prepared to cash.”

Still, close watchers of the North American alliance suggest the coming round of summitry remains an excellent opportunity for Canada to build momentum for a better NAFTA. The 20th anniversary, which includes a month-long series of receptions, comes replete with academic policy papers and critical reviews rich in recipes for improvement.

“NAFTA 1.0 was all about big business. And NAFTA 2.0 is, or at least could be, about small business,” said Laura Dawson of the cross-border trade consultancy Dawson Strategic.

“The next phase should be things like streamlining paperwork so that small, high-tech operators out of Toronto can more easily become significant contractors doing work more easily with Silicon Valley and beyond,” said Dawson, co-author of a recent research paper on North American competitiveness.

“The challenge is that we need to focus on unsexy issues that are hard to build political momentum around. Whether its food, country-of-origin labelling, health and consumer products, transportation or the size of safety belts — all that dull stuff needs the high-profile push from leaders to get the regulators jumping to make it happen,” said Dawson.

As it happens, the senior U.S. official who spoke to reporters on background Wednesday said almost exactly the same thing in describing what comes next for NAFTA.

“We all do fine the rest of the year when we’re not meeting at (a summit),” the U.S. official said of the Canada-U.S.-Mexico relationship. “We have bilateral mechanisms in some areas, trilateral in others. But we get kind of bogged down and lazy.

“So the plus (in the upcoming Three Amigos Summit), to be honest, is the prime ministerial/presidential kick in the rear end to accelerate what we’re doing. That’s incredibly important. We all need that.

“Because otherwise we’d be very comfortable going about 25 miles per hour. And the presidents and prime minister will come together and say,

‘This is just not good enough. You gotta be doing 60.’ ”

 source: The Star