Renegotiated NAFTA Deal Could Be Completed In Weeks
RACHEL MARTIN, HOST:
Within a few weeks, we could have a renegotiated NAFTA deal. That's what leaders from Canada, Mexico and the U.S. announced this weekend after meeting at the Summit of the Americas in Lima, Peru. President Trump has been insisting on a renegotiation of this deal since his 2016 presidential campaign. And the three nations have been in talks about NAFTA since last summer but with very little to show for these talks. Why that might be changing now - let's ask Christophe Bondy. He was a senior counsel to Canada in its free trade agreement with the EU last year.
Mr. Bondy, thanks for being with us.
CHRISTOPHE BONDY: No problem. Happy to be here, Rachel.
MARTIN: Can I ask you to do some heavy lifting here and outline what each of these three countries hopes to get out of a new NAFTA?
BONDY: Well, I think for - from Canada's perspective, there are technical things that we want to correct things, like e-commerce, that wasn't included in the first agreement because it was - back in 1992, it was negotiated - but otherwise to maintain a sensible balance of things like rules of origin and the tariffs - and for Mexico, as well. I think the United States has cut a much more nationalist line in terms of the rhetoric, but it seems to be coming around to understanding the kind of fundamentals of how these agreements work, the benefits it brings to the U.S. economy and, therefore, seeking to close a deal, which is really to the benefit of all three of the states.
MARTIN: For many months now, as we noted, there's been a lot of talk, but nothing has moved the ball forward, so to speak, on renegotiations of NAFTA. Now trade reps are saying, this could really happen; it could happen soon. Why? What changed in the dynamic?
BONDY: Well, I think it's because the U.S. and Mexico are both up against timelines - the U.S. with midterm elections and their various approvals that are linked to those that they need to kind of get this done now, and then you have the Mexican elections coming up after that. And so there's a huge amount of political pressure to show that they've gotten to a deal. It - let's not kid ourselves. It's not going to be a deal with all of the T's crossed and the I's dotted. It will be an agreement in principle on some of the main political issues, but that's also typically how trade deals are negotiated. Usually, it happens the other way around, though. You deal with all the nitty-gritty, and then you deal with the tough political issues towards the end. Here, they seem to be trying to front-end load to say, we made a deal, and then leave it with all the poor trade negotiators to actually work out the detail of it.
MARTIN: Do you think that's the right strategy?
BONDY: Well, I think there is a strong political will here to say that there has been an update. My understanding is President Trump said as part of his platform that he was going to significantly improve the NAFTA and that he wants to deliver on that. And so they're going to deliver something. And, you know, these things usually take an enormous amount of time. So when they said last autumn, beginning of September, you know, we're going to get it done by Christmas, that didn't seem very realistic. So this is why I say I think what they're going to do is have an agreement in principle. And there are key issues, like rules of origin, for example, I'm pretty interested to see where the U.S...
MARTIN: Explain what that is just briefly before we let you go.
BONDY: Sure. Rules of origin are what counts as a good coming from the three NAFTA countries, what counts as a U.S. product. And so the position of the administration the U.S. has been to increase those rules. But at the end of the day, the increase in rules can actually have a negative impact on the cost of U.S.-produced products.
BONDY: And so there seems to be more economic good sense coming about.
MARTIN: OK. To be continued. Christophe Bondy - he was the lead negotiator for Canada in its free trade agreement with the EU last year. Christophe, thanks so much for helping us understand this. We appreciate it.
BONDY: No problem. Thank you.
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