Canada re-enters NAFTA talks with ‘little’ bargaining power

VANCOUVER (NEWS 1130) – After a tentative deal between the U.S. and Mexico earlier today, Canada said it will start talking again with its counterparts Tuesday.

Foreign Affairs Minister Chrystia Freeland cancelled her trip to Europe and will be going to Washington, D.C., instead to be part of the talks. Among the list of items to be hashed out by the negotiating teams will be the dairy sector, a thorny issue over which President Donald Trump threatened further tariffs on Canada’s car industry if Freeland’s team does not concede on policies.

“We’ll start negotiating with Canada relatively soon, they want to negotiate very badly,” Trump said in the Oval Office earlier today. “But one way or the other, we have a deal with Canada. It will either be a tariff on cars, or it will be a negotiated deal; and frankly a tariff on cars is a much easier way to go, but perhaps the other would be much better for Canada.”

“We’re looking to help our neighbours,” Trump added. “If we can help our neighbours, that’s a good thing, not a bad thing. So, we’ll start that negotiation imminently.”

James Brander, a NAFTA expert at UBC’s Sauder School of Business, says he believes Canada’s bargaining position will be weak when trilateral talks resume this week.

“Canada has a little bit of negotiating power, but not a lot of negotiating power,” Brander says. “Canada would have to accept most of what the U.S. and Mexico have agreed to, which, in my opinion, is not bad — not bad at all.”

However when it comes to renegotiating policies on trade on dairy, Canada may end up on its heels. He adds dairy farmers may not like it, but Trump’s bullying tactics, which include harsh tariffs imposed earlier this year, have already hurt Canada and now he’s threatening to slap more against automotive imports.

“There are some other issues that are a major irritant, the most important of which is the dairy sector and I think Canada would have to give some ground on that,” Brander adds.

In Richmond last Friday, Freeland downplayed concerns about Canada’s clout in the NAFTA talks.

Following Trump’s announcement, Trudeau’s office issued a statement saying the prime minister spoke with Mexican President Enrique Pena Nieto on Sunday about NAFTA’s renegotiation and “shared their commitment to reaching a successful conclusion to this agreement for all three parties.”

Canada has been absent from the NAFTA bargaining table since trilateral talks paused last spring.

— with files from The Canadian Press