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Trump hamstrings U.S. NAFTA negotiators, says Canada's chief negotiator

Last Updated Feb 13, 2018 at 4:12 pm EDT

Chief NAFTA negotiator Steve Verhuel delivers a speech at the Rideau Club in Ottawa on Tuesday, February 13, 2018. THE CANADIAN PRESS/ Patrick Doyle

OTTAWA – Canada’s chief NAFTA negotiator says only limited progress has been made in revamping the continental trade pact because U.S. negotiators are being hamstrung by the Trump White House and the meeting pace has been too fast.

Steve Verheul said Tuesday the current NAFTA talks are the most unusual negotiation he’s ever been involved in.

“They do not come to the table — our counterparts — with a lot of flexibility. This is being driven to a large extent from the top, from the administration and there’s not a lot of flexibility,” the veteran negotiator told an Ottawa trade gathering in what was a hard-hitting and sobering update on the renegotiations.

President Donald Trump’s threat to trigger NAFTA’s six-month withdrawal notice remains a possibility and Canada is ready for any eventuality, he said.

If it happens, Verheul said it might simply be a negotiating tactic.

But the normally reserved Verheul warned “the worst possible outcome” would be for the United States to go it alone — a scenario he warned would weaken North America, allowing other countries and regions to take easy advantage.

Canada has concerns of its own with what the American negotiators have put on the table, Verheul said — notably a Buy American component that would limit how many public contracts can be won by its free-trade neighbours.

The U.S. has proposed limiting Canada and Mexico to one dollar of contracts for every dollar in contracts granted by Canada and Mexico to American companies, an idea Canada and Mexico alike have branded a non-starter.

That “is the worst offer ever made by the U.S. in any trade negotiation,” Verheul said.

“(It) would leave us in a position where the country of Bahrain would have far better access to U.S. procurement markets than Canada would, or that Mexico would, and we’ve clearly said this kind of offer is not possible.”

Canada will stay at the negotiating table for as long as it takes, Verheul said. But it’s impossible to predict the next move of a notoriously unpredictable president, he warned.

Even though three chapters have been closed, the pace has been “fairly limited progress over all,” he said.

“We have been meeting frequently perhaps a bit too frequently because we don’t have all that much time between rounds to start to re-evaluate positions, start to think about how we might be able to make further progress in different areas,” Verheul said.

“The pace has been a bit too fast to do a lot of the kind of homework that needs to be done domestically to allow further progress to be made,” he added.

“That is a consequence of trying to move too quickly in a negotiation like this.”

The seventh round of NAFTA talks is set to begin later this month in Mexico City with substantial differences remaining on autos, a sunset clause and an investor-dispute resolution mechanism, and U.S. demands for greater market access to Canada’s protected dairy industry.

“Heading into the next round, we will bring a lot of ideas to the table. We will be aiming to achieve real progress and we’re hoping the U.S. will bring a similar attitude to the table,” said Verheul, who then added: “We’re somewhat more confident that Mexico will bring that attitude to the table.”

The North American Free Trade Agreement renegotiation survived its sixth round of talks in Montreal, with U.S. trade czar Robert Lighthizer saying enough progress was made to push forward despite American dissatisfaction with some Canadian proposals.

Lighthizer also called Canada’s wide-ranging complaint to the World Trade Organization about American use of punitive sanctions a “massive attack” against U.S. trading practices.

Earlier this week, Trump complained about Canadian trade practices and threatened an undefined international tax, reviving fears of new American import penalties — a fear the White House has since played down.