Freeland to address MPs on Canada’s approach in NAFTA talks

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Foreign Affairs Minister Chrystia Freeland is set to outline Canada's approach to renegotiating the North American free-trade agreement on Monday, ahead of this week's formal launch of talks with Mexico and the United States.

The minister is expected to say that strengthening environmental and labour provisions in the deal will be a priority for Canada's negotiating team, according to a government official.

Renegotiating NAFTA was a key political promise of U.S. President Donald Trump, but Ms. Freeland will outline why she believes it is also in Canada's economic interests to renew the deal.

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Ms. Freeland is scheduled to deliver a morning speech on NAFTA, followed by an appearance before the House of Commons international trade committee and then a news conference with reporters.

Conservative and NDP MPs say they will push the minister to provide more detail as to Canada's priorities in advance of the launch of official negotiations in Washington on Wednesday.

U.S. Trade Representative Robert Lighthizer released an 18-page document last month outlining American priorities in the negotiations, but Canada has yet to release a similar outline of its objectives.

Conservative MP Randy Hoback, his party's critic for Canada-U.S. relations, said the minister should be able to provide Canada's high-level goals without compromising its negotiating position.

"If you don't say anything, then you let the U.S. control the agenda, which isn't helpful either," he said. "I think what you need to do is lay out your objectives, so that people understand exactly what is your intent and what you hope to achieve out of these talks."

NDP MP Tracey Ramsey agreed.

"So far, the Liberals have really left Canadians in the dark about where they're at in response to what we can clearly see coming out of the U.S., which is 18 pages of their priorities," she said.

Ms. Freeland is scheduled to speak Monday before a special summer sitting of the House of Commons committee on international trade. She will be joined by international trade deputy minister Tim Sargent, chief NAFTA negotiator Steve Verheul and Martin Moen, a director-general for North America at Global Affairs Canada.

The United States has set an ambitious timeline for negotiations. Mr. Lighthizer has said he would like to reach a deal by December, but also acknowledged that that may be ambitious and that he has not set a firm deadline.

Nonetheless, observers expect the United States will want to present a deal to Congress by the spring of 2018, before legislation authorizing the talks expires in July. A presidential election is also scheduled for July 1 in Mexico, which is also viewed as a reason to expect a deal by early 2018.

Scotiabank chief economist Jean-François Perrault said the U.S. political environment could lead to a prompt and modest renegotiation.

"The compressed timetable implies a hope of achieving a quick deal on points of common interest that can be held up as an achievement that contrasts with the US administration's delayed domestic agenda – rather than an all-or-nothing wholesale reworking of NAFTA," he wrote in a research paper Friday.

Ohio-based international trade lawyer Dan Ujczo of the firm Dickinson Wright agrees that this is where the talks appear to be heading, but he warns such a "vanilla" deal would be a hard sell for U.S. Democrats and Republicans seeking re-election in 2018.

Mr. Ujczo pointed out that many voters in Ohio, Michigan and Wisconsin supported Mr. Trump because of his pledge to replace NAFTA and they will be seeking a change with substance.

Parties will be holding primaries in the spring of 2018 to select candidates for the November U.S. midterm elections. The midterms will feature contests for all House of Representative seats, one third of the Senate and most state governorships.

"We're increasingly looking at a non-confrontational deal to get it done within the time frame that we want, but a vanilla deal won't sell in the heartland of the United States, both to Democrats and Republicans," Mr. Ujczo said in an interview. "Here, the midterms are looming large … I don't see, at present, how the votes add up."

The NDP will be urging the minister to provide details on its approach to labour and environmental issues and to provide Canada's response to the detailed objectives outlined last month by the United States.

"Responding with what our priorities are and making that clear – not just for Canadians, but for the Americans and the Mexicans – going into these negotiations is exactly what we should be doing," Ms. Ramsey said.

Ms. Freeland met Friday in Edmonton with Canadian agriculture organizations to get their views ahead of the formal talks. She said last week that Canadian agricultural stakeholders are looking to use the NAFTA talks as an opportunity to reduce some of the red tape in cross-border trade.

Brian Innes, president of the Canadian Agri-Food Trade Alliance, attended Friday's meeting in Edmonton. He said Canada's highly regulated agricultural sector is looking for ways to harmonize with its U.S. counterparts on regulatory matters. He pointed to the meat sector as one area for improvement.

"We have double inspection so when a meat product crosses the border, it has to get re-inspected and that imposes cost and a lot of uncertainty for exporters," Mr. Innes said. "So that's the type of thing where we can reduce regulatory burden."

With a report from Michelle Zilio