[CTC] Negotiating topics at next week's NAFTA Round

[Arthur Stamoulis]

Not even a mention of labor and environment chapters...

INSIDE US TRADE

Dispute settlement, procurement not on NAFTA intersessional schedule 

December 07, 2017 

NAFTA negotiators are not planning to address hot-button issues like government procurement and dispute settlement at an intersessional meeting in Washington, DC, that will begin on Dec. 9 and end on Dec. 15, according to a schedule obtained by Inside U.S. Trade.

Sources say the omission of controversial topics is a move by negotiators to focus on areas where the most progress is possible. Chapters on digital trade, trade facilitation, good regulatory practices, telecommunications, customs, technical barriers to trade and sanitary and phytosanitary measures could be closed or close to finished at the intersessional, sources said, although SPS is not on the schedule.

The intersessional will not include U.S. Trade Representative Robert Lighthizer or his counterparts. NAFTA negotiators will reconvene for the sixth official round of talks in Montreal Jan. 23-28.

Rules of origin is one sensitive area that will get attention from negotiators at the intersessional, but sources noted that negotiators have a mountain of issues to discuss in that space independent of the controversial U.S. auto rules-of-origin proposal. Negotiators will discuss rules of origin Tuesday, Wednesday and Thursday.

Negotiators will begin the intersessional Saturday with talks on textiles, an area in which the U.S. is at loggerheads with Mexico, Canada and the apparel industries of all three countries. The U.S. has proposed text that would eliminate tariff preference levels and create a CAFTA-DR style short-supply list. That proposal has been rejected by the other parties.

Energy will be discussed on Tuesday. Canada and Mexico want a chapter devoted to the issue, but the U.S. believes energy-related obligations can be folded into other parts of the agreement. President Trump this week showed interest in the addition of an energy “component” to NAFTA <https://insidetrade.com/node/161237>, senators told Inside U.S. Trade.

Digital trade is on the agenda for Thursday and Friday -- with the main sticking point being the U.S. stance that the chapter should include so-called safe harbor provisions on internet service provider liability, according to Canada’s chief negotiator, Steve Verheul. Sources say this chapter is likely to go beyond what was agreed to in the Trans-Pacific Partnership e-commerce chapter.

Customs, along with sectoral annexes, will be discussed on Sunday and Monday, although Canada and Mexico are dug in against de minimis changes, sources said.

Financial services is on the agenda for Monday through Wednesday, and while negotiators are largely aligned on the text, negotiations on investor-state dispute settlement are preventing it from being closed, sources said.

State-owned enterprises will be discussed on Monday and Tuesday. Sources say progress is being made on the chapter; the outstanding issues are how to define ownership, direct and indirect control and sub-central coverage.

Telecommunications talks are slated for Tuesday and Wednesday. The hold-up in that area is the U.S.’ push for the chapter to lock in Mexican reforms, including a policy to prevent companies from charging competitors for calls using their networks. Enshrining that is a no-go for Mexican negotiators because of the Mexican Supreme Court’s ruling that interconnection rates must be set by regulators, not legislators, sources said.

Sessions on market access and technical barriers to trade are scheduled for Thursday and Friday. Talks on the competitiveness chapter are slated for Wednesday.

Canadian and Mexican negotiators will come to Washington after spending much of the fifth round pushing back against U.S. proposals on dispute settlement, government procurement and auto rules of origin, as well as a sunset clause, but holding back on offering counterproposals. U.S. proposals in those areas are seen as non-starters for Canada and Mexico.

Verheul this week said he was having trouble figuring out what the U.S. needs for “a win” in the NAFTA negotiations <https://insidetrade.com/node/161226>. He said it would be possible for Canada to come up with creative proposals aimed at resolving U.S. concerns in key areas, but that it was not clear if they would satisfy the Trump administration’s desire for a reshaped deal that results in the U.S. reaping benefits at the expense of Canada and Mexico. 
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