NAFTA framework still possible this month, Canadian ambassador says
David MacNaughton, Canada's ambassador to the United States, heads from the microphone after talking to reporters as the Liberal cabinet meets in St. John's, N.L. on Tuesday, Sept. 12, 2017. (Andrew Vaughan / THE CANADIAN PRESS)
Published Saturday, August 11, 2018 7:00AM EDT
OTTAWA -- Canada's ambassador to Washington, D.C. says he hopes trilateral talks will resume next week if the U.S. and Mexico can resolve its current dispute over automobiles, and says a framework agreement is still possible by the end of the month.
Though, Canadian Ambassador to the U.S. David MacNaughton’s optimism came ahead of a Friday evening tweet from U.S. President Donald Trump, who said "Canada must wait," because the deal with Mexico is “coming along nicely,” and Canadian tariffs and trade barriers are "far too high."
Trump also restated his ongoing threat to impose tariffs on autos if a deal cannot be reached.
A government official speaking on background tells CTV News that the ongoing three-way negotiation will continue after the current U.S.-Mexico meetings conclude. The official said that Canada’s focus remains unchanged and that they’re glad that bilateral issues are being sorted out between the U.S. and Mexico.
MacNaughton was in Ottawa for high-level meetings regarding NAFTA this week. In an interview with CTV's Ottawa bureau chief Joyce Napier, MacNaughton said Canadian officials are regularly in touch with their U.S. counterparts.
"We talked to the White House and we've basically said, 'Look, we're ready whenever you are,'" MacNaughton said.
"And they said, 'We're working away on it, and hopefully we can get it resolved with the Mexicans soon.' Hopefully we get back together with the three of us next week."
A framework agreement is still possible this month, he said,"but if it's going to happen, then everybody's going to have to come to the table with some flexibility."
"I think the minister said it -- this is a negotiation, not a capitulation."
The following is a transcript of CTV's interview with MacNaughton, edited for clarity and content.
CTV: Where are we at with the NAFTA talks? There's been talk that Canada was snubbed, that [Foreign Affairs Minister] Chrystia Freeland begged to be at the table, and now there's talk of a bilateral deal between Mexico and the U.S.
David MacNaughton: There were a lot of stories out there that said we actually didn't want a deal, we wanted to wait until after the [Mexican] election and that this was all a tactic. And so I think the minister quite rightly said, no, no, no, we want to get a deal, we're there, we want to be involved in the discussions, and then the story comes out saying we're asking to be at the negotiations, we're not allowed to be there.
The reality is that the Mexicans and the Americans have to resolve some issues around automobiles. And Canada actually came up with a concept in Montreal at the end of January that has really changed the nature of the debate around the rules of origin. That was when we introduced the notion of getting credit for autos and automobile parts produced in high-wage factories. Which basically meant Canada and the U.S., and disadvantaged Mexico.
But I think where the Mexicans are is, obviously, they don't want to see any of their existing facilities closed or workers laid off, and so there's a lot of discussion around over what period of time would these new rules be introduced and would there be exceptions that would allow these factories to continue. All of those things are extraordinarily complex and I think that's the detail that the Mexicans and the Americans are working through, and I hope that they come to some resolution because basically the concept they're talking about is something that we buy into, and then we can get on with the rest of the issues that are hanging over, or need to be resolved.
CTV: I understand it's a Canada-U.S. thing because it's a high-wage issue. But why wouldn't you be there? If that is something that you're on board with, wouldn't it be better that you be there anyway to help move this along?
DM: We were, all the way through in April and into May, and in fact our auto negotiators, the people who know this rules of origin stuff inside and out, were part of the discussions. And I think there's been conversations back and forth at the technical level, so I think we're pretty satisfied with the way things are going. And there's no real need for the minister to be involved in those discussions at this point. When we get to some of the issues that Canada is most concerned about, then obviously we will be at the table.
CTV: Where are we going now?
DM: Sec. Guajardo [Mexican economy secretary Ildefonso Guajardo] yesterday said they were still talking about rules of origin and talking about automobiles, and he said that they had narrowed their differences, they were getting close. That's been the way it's been for two weeks now. I think it is complex. I do expect that they will resolve those things in a short while and we will be back at the table.
CTV: A short while - what's that in your world?
DM: Ten days maybe, max. I think if they haven't resolved in the next few days, in the next week, then it's going to be hard for them to resolve.
CTV: I know they don't like our subsidies to dairy.
DM: It depends on who you talk to. Obviously what the Americans have put on the table in the NAFTA negotiations is the whole supply management system. But if you talk to individual dairy people in the United States or even the people who are in the leadership positions, all they want is they want more access to our markets at our prices. And they subsidize their dairy industry and what they want is to sell their subsidized dairy products in Canada at higher prices. I would too if I were them. But we're going to have to resolve some of these issues. You know, the Americans have a similar kind of situation on sugar where they block imports -- they have very high tariffs,300 and some per cent... There's all sorts of agricultural products where they protect their industry. So it'll be a bit of give and take. Hopefully.
CTV: I've got to ask you about Saudi Arabia. I know it's not your file, you're all about Canada-U.S. and NAFTA. But are you approaching, diplomatically, any American? Have you approached the Americans on behalf of Canada?
DM: No I haven't, and as you say, I find that I have enough things on my plate right now. And it's not just NAFTA. We have [disputes over paper, steel and aluminum, and automobiles]. There are a lot of issues that I have to deal with on a regular basis, and I'm not particularly interested in expanding the amount of things that I need to deal with. And obviously Minister Freeland and the prime minister are dealing with it, and I have full confidence that they're going to do a good job.
CTV: Okay, but you're a diplomat and we're not. In the world of diplomacy, how big is this Canada-Saudi-Arabia dispute?
DM: I don't know the ins and outs of it. Obviously the Saudis have made a big deal of it. I hope that we can find a way to resolve it, but I think the prime minister has said consistently that we will stand up for human rights around the world and I think that's something that Canada has always done and always will.
CTV: But seriously, because we in the media give it a certain amount of importance, in the world of diplomatic spats, where does it sit?
DM: As you know, I'm not a career diplomat, so I wouldn't be able to look back and say this ranks with some other dispute that we had with somebody else. I'm in the U.S., focused on the U.S. relationship, and I have full confidence that the minister and the prime minister will deal with this issue in an appropriate way.
CTV: Back to NAFTA. What's the next step? Is it the Americans and the Mexicans coming up to you and saying, we're ready?
DM: Yeah. I talked to Minister Freeland on Monday. She has been in touch with Ambassador [Robert] Lighthizer [the U.S. trade representative]. I've talked to Ambassador [Kelly] Craft [U.S. ambassador to Canada]. We're keeping in touch on a regular basis. We talked to the White House and we've basically said, look, we're ready whenever you are, and they said we're working away on it, and hopefully we can get it resolved with the Mexicans soon. Hopefully we get back together with the three of us next week.
I can predict exactly when it is that we're going to get back together: when I decide I'm going to take a couple of days holiday.[laughs]
CTV: There was talk at the beginning of the month that, optimistically, we could have a framework by the end of August. Is this still within the possibilities?
DM: It is within the possibilities, but if it's going to happen then everybody's going to have to come to the table with some flexibility. There are certain things that we are flexible on and there are certain things that are very challenging for us, and I think we've made it very clear right from the beginning that the sunset clause as currently proposed doesn't work, and we need to have a robust dispute resolution mechanism. And after that, there are obviously things that we would like to see from the Americans and they would like to see from us, and that's a matter of negotiation. But it has to be a negotiation. I think the minister said it -- this is a negotiation, not a capitulation.
CTV: On de minimis. I know it's something people are not talking about, but Americans are not happy with the $20 limit[on what Canadians can have shipped over the border without being subject to tariffs]. I know you've got the retail lobby [opposed].
DM: On the one hand, the Americans are putting on the table that they want to see a significant increase in de minimis. On the other hand, the president is tweeting, frequently, about Amazon and its impact on small retailers in the United States. His arguments about Amazon and retailers is the same argument that the Retail Council of Canada is making about de miminis in Canada.
Obviously with e-commerce and all of the changes that are going on, there is pressure to look at de minimis and whether or not the $20 is the right number or not. But I'm not going to start talking about what we'd be prepared to live with or not because I don't mind negotiating with you,but I really don't think it's appropriate.