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Free trade agreements

What issues will the US and Canada wrestle with in NAFTA talks?

Published 20 July 2017

As NAFTA negotiations get underway, the United States and Canada face a challenging mix of issues. Some represent longstanding disputes between the two countries. Others may be new priorities for the Trump Administration and untested in trade agreements. Still others, like commitments to facilitate digital trade, both sides are ready to agree. Here's your cheat sheet.

In a June 2017 policy brief, Gary Clyde Hufbauer and Euijin Jung of the Peterson Institute offer an excellent overview of the issues the United States and Canada are likely to wrestle with once NAFTA negotiations get underway in mid-August. It’s a challenging mix. Some issues represent longstanding disputes like Canada’s supply management for dairy, chicken and eggs and American restrictions on shipping and trucking that add costs and perpetuate inefficiencies in North American trade. Some complaints such as the U.S. desire to have American exports exempted from Canada’s goods and services tax (GST) will get tangled up with domestic debates in the United States over tax reforms.

The Trump Administration may be keen to introduce new commitments to “balance trade” (i.e., they don’t like the idea of running a bilateral trade deficit with other countries) despite the mutually favorable terms on which the United States and Canada currently trade. The hit parade will also include issues that have been litigated in courts but one side didn’t like the outcome, like Canada’s patent utility requirements. All of these bilateral peeves will be rehashed in the context of updating general rules, many of which the United States and Canada are likely to find quick agreement on, such as on e-commerce and digital trade, upgrading environmental commitments, and regulatory cooperation.

We encourage you to read the Hufbauer and Jung brief that provides just enough detail and no inside ball. To keep a quick list, TradeVistas offers the graphic above. Share it with anyone interested in the NAFTA re-negotiations.

Here’s a link to the full graphic, right click to save it, or share it using our social buttons.

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Andrea Durkin is Principal of the trade advisory firm Sparkplug, LLC and the creator of Consensus Learning®, an innovative digital tool for teaching negotiation skills deployed in graduate classrooms, think tank simulations and government training.

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