NAFTA Update (Following round 5, Mexico City)

December 5, 2017

CHC continues to monitor NAFTA re-negotiations closely and to actively engage with Canadian negotiators and our counterparts in the U.S. and Mexico, to ensure the Canadian horticulture sector can continue to grow.

CHC and CPMA travelled to Mexico City for Round 5, which was held from November 17-21. CHC was present to ensure Canada’s fruit and vegetable producers were well represented. CHC and CPMA reached out to U.S. and Mexican industry counterparts to review and strengthen mutual positions. The fifth round of negotiations did not see the resolution of any major differences, such as the seasonal tariff, dispute resolutions and the sunset clause. There were, however, some significant advances on traditional trading issues, such as sanitary and phytosanitary (SPS) issues and biotechnology.

Round 5 Summary Points

  • Phytosanitary regulations: Progress was made on import checks and audits, but negotiators remain far apart on equivalencies and the concept of alignment.
  • Biotechnology: there has been substantial progress on Biotechnology, at a more advanced level than in the TPP. Negotiators are currently working on the definition of biotechnology.
  • Exporting: Positive work has also been done in the area of export subsidies, disciplined use of export credit, and food aid.
  • Trade Remedies: there was no discussion on the seasonal text during Round 5. Canadian negotiators remain committed to working with CHC to ensure our industry’s voice is heard in the negotiations. This proposal remains divisive in the U.S. between the domestic and export-minded markets. We continue to encourage our like-minded counterparts to lobby U.S. politicians to pull back on the seasonal proposal.
  • Sunset Clause: Mexico put forward a counterproposal to the sunset clause consisting of a 5-year review of the trade agreement, without a looming closure.
  • Financial Protection: Canadian industry continues to bring up PACA and a PACA-like deemed trust for Canada. Mexican stakeholders have not heard anything from their negotiators on proposing text.

All three countries have vowed to continue talks through March. However that does not mean the negotiations have to be concluded by March.

CHC will continue to provide updates as negotiations progress.