Transcript: Trade on the Table | Jan 26, 2018

Steve sits in the studio. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a gray suit, white shirt, and purple tie.

A caption on screen reads "Trade on the table. @spaikin, @theagenda."

Steve says WHEN CANADA AND MEXICO
ANNOUNCED EARLIER THIS WEEK THAT
THEY'D SIGNED ON TO A NEW
TRANS-PACIFIC TRADE DEAL -
WITHOUT THE UNITED STATES ADDING
ITS SIGNATURE - SPECULATION
IMMEDIATELY TURNED TO WHAT THAT
DEAL MIGHT DO TO THE NAFTA TALKS
UNDERWAY IN MONTREAL.
BUT, AS PRIME MINISTER TRUDEAU
AND U.S. PRESIDENT TRUMP MADE
THE ROUNDS AT THE WORLD ECONOMIC
FORUM IN DAVOS, SWITZERLAND, A
SOMEWHAT SURPRISING THING
HAPPENED: A GLIMMER OF NAFTA
OPTIMISM APPEARED.
JOINING US NOW FOR MORE, IN THE
NATION'S CAPITAL:
COLIN ROBERTSON, VICE PRESIDENT
AND FELLOW OF THE CANADIAN
GLOBAL AFFAIRS INSTITUTE AND A
MEMBER OF THE NAFTA ADVISORY
COUNCIL TO THE DEPUTY MINISTER
OF INTERNATIONAL TRADE.

Colin is in his fifties, clean-shaven with receding blond hair. He's wearing a gray suit, blue shirt, and striped blue and yellow tie.

Steve continues AND IN OUR STUDIO:
MARK WARNER, PRINCIPAL AND
U.S.-CANADIAN TRADE LAWYER AT MAAW LAW.

Mark is in his fifties, clean-shaven, with short curly gray hair. He's wearing a gray pinstripe suit, white shirt, and striped red tie.

Steve continues MARK, IT'S GOOD TO SEE YOU AGAIN
IN THAT CHAIR.
COLIN ROBERTSON, GOOD TO HAVE
YOU ON THE PROGRAM.
I WANT TO START BY JUST, WELL,
LET'S PLAY A LITTLE CLIP.
HERE'S PRIME MINISTER TRUDEAU AT
DAVOS EARLIER THIS WEEK.
ROLL IT.

A clip plays on screen with the caption "January 23, 2018."
In the clip, Prime Minister Trudeau gives a speech at the World Economic Forum.

He says PEOPLE ARE WORRIED OR HAVE
INCREASINGLY BECOME CONVINCED
THAT TRADE DEALS BENEFIT THE
FEW, NOT THE MANY.
BENEFIT A COUNTRY'S BOTTOM LINE,
BENEFIT MULTINATIONALS, BUT
DON'T BENEFIT ORDINARY WORKERS.
NOW THERE HAVE BEEN EXAMPLES OF
THAT IN THE PAST.
AND THE CHALLENGE THAT CANADA
FUNDAMENTALLY AS BOTH A
PROGRESSIVE AND A TRADING NATION
HAS FACED IS, HAVE WE PUT THOSE
TWO THINGS TOGETHER?
BUT IF WE'RE GOING TO PUSH BACK
AGAINST THE ANTITRADE TENDENCY
IN GLOBALIZATION THAT WILL LEAVE
US ALL WORSE OFF, WE HAVE TO PUT
THE CONCERNS AND THE WELL-BEING
OF OUR ORDINARY CITIZENS AT THE
CENTRE OF WHAT WE ARE NEGOTIATING.

The clip ends.

Steve says COLIN ROBERTSON, TO
YOU FIRST.
LET'S GET A BETTER UNDERSTANDING
OF THIS NEW TRANS PACIFIC
PARTNERSHIP THAT CANADA HAS
SIGNED ALONG WITH 11 OTHER
COUNTRIES, NOT THE UNITED
STATES, OBVIOUSLY.
IT'S CALLED THE COMPREHENSIVE
AND AGGRESSIVE AGREEMENT FOR
TRANS PACIFIC PARTNERSHIP.
LET'S START WITH THAT NAME.
WHAT IS PROGRESSIVE ABOUT THIS
NEW DEAL?

The caption changes to "Colin Robertson. Canadian Global Affairs Institute."
Then, it changes again to "The Tokyo deal."

Colin says IT INCLUDES CHAPTERS ON THE
ENVIRONMENT AND LABOUR AND IT
LOOKS AT THE NEW ECONOMY, SO THE
DIGITAL ECONOMY, THE FACT THAT
WE BUY THINGS ON AMAZON AND
OTHERS.
THAT'S A PIECE OF THAT.
THAT'S PARTS OF WHAT THE
COMPREHENSIVE AND THE
PROGRESSIVE SIDE.
THIS IS MORE THAN THE CLASSIC
TRADE AGREEMENT WHICH SIMPLY
DEALT WITH TARIFFS.
THAT'S HOW WE DID THINGS REALLY
UNTIL... INCLUDING THE NORTH
AMERICAN FREE TRADE AGREEMENT,
AND THEN AFTER THE SEATTLE ROUND
I THINK IN 1999, WE HAD TO
REALIZE WE HAD TO PAY MORE
ATTENTION TO THE EFFECT THIS HAD
ON THINGS LIKE THE ENVIRONMENT,
ON LABOUR STANDARDS.

A map pops up briefly showing the location of Ottawa.

Steve says DO YOU AGREE IT WAS
RIGHT FOR CANADA TO SIGN THIS AGREEMENT?

Colin says ABSOLUTELY.
THE FASTEST GROWING MARKET IN
THE WORLD RIGHT NOW IS THE
PACIFIC, AND WHAT THIS DOES IS
THIS SETS STANDARDS THAT OTHER
COUNTRIES WILL APPLY... I THINK
THE TPP 11 AS IT'S CALLED NOW
WITH JAPAN THE LARGEST, CANADA
THE SECOND BIGGEST, MEXICO, A
GROUP OF OTHERS, WE'RE GOING TO
SEE COUNTRIES LIKE KOREA,
INDONESIA, OTHER ASIAN COUNTRIES
ARE GOING TO MIGRATE TO THIS.
THERE WAS A COMPETING TRADE
GROUP THAT THE CHINESE HAD LED,
BUT IT WAS A MUCH LOWER
STANDARD.
THE FACT THAT THIS HAS LIFE AND
HAS TAKEN WING, THIS IS GOOD
NEWS FOR CANADA AND THE FACT
WE'RE THERE AT THE PRESENT AND
WE HAD A MAJOR HAND IN THE
CREATION, THE FACT AS YOU POINT
OUT, STEVE, IT IS THE
COMPREHENSIVE AND PROGRESSIVE.
THAT'S A CANADIAN ADDITION.

Steve says MARK, IS IT YOUR
VIEW IT WAS RIGHT FOR CANADA TO
SIGN THIS?

The caption changes to "Mark Warner. MAAW Law."

Mark says I THOUGHT WE
SHOULD HAVE SIGNED IT WHEN THE
NEW GOVERNMENT CAME TO POWER IN
2016 WHEN OBAMA NEEDED A COUNTRY
LIKE CANADA TO SIGN IT AND
RATIFY AND POWER TO GET IT
THROUGH CONGRESS.
CANADA NEVER EVEN MENTIONED IT.
WE WENT TO THE WHITE HOUSE.
MR. TRUDEAU SAT ON THE WHITE
HOUSE LAWN, NEVER MENTIONED TPP
ONCE.
DIDN'T MENTION IT ONCE WHEN
OBAMA HAD HIS VISIT HERE.

Steve says A FEW MONTHS AGO
THERE WAS AN OPTION OF SIGNING
IT AND PRIME MINISTER TRUDEAU AT
THAT POINT SAID I'M NOT GOING TO
SIGN IT BECAUSE IT'S NOT GOOD ENOUGH.

Mark says WE WAITED AND AT THE END OF
THE DAY WHAT WE'VE DONE IS
SUCCEEDED IN SUSPENDING A FEW OF
THE CHAPTERS, THE INTELLECTUAL
PROPERTY PROVISIONS, JAPAN
FOUGHT THAT BECAUSE THEIR MAJOR
OBJECTIVE IS TO HAVE THE UNITED
STATES IN THE AGREEMENT.
THEY'LL HUMOUR YOU, CANADA, AND
MAYBE NEW ZEALAND.
ONCE THE UNITED STATES WANTS
BACK IN THOSE TERMS, THEY'RE
GOING BACK IN.

Steve says EXPLAIN THE
IMPLICATIONS OF THAT.

Mark says THE COMPLICATIONS OF THAT ARE
THE CANADIAN GOVERNMENT GETS TO
SAY AT HOME THAT THEY GOT RID OF
CERTAIN INTELLECTUAL PROPERTY
PROVISIONS THAT ARE
CONTROVERSIAL IN SOME CIRCLES.
I DISAGREE WITH THOSE.
THERE ARE SMART PEOPLE THAT HAVE
DIFFERENT VIEWS.
BUT THE U.S... PART OF THE
MAJOR TRADING AGENDA, THE TRADE
PROMOTION AUTHORITY OF THE
PRESIDENT WAS GIVEN TO PRESIDENT
OBAMA AND IT APPLIES TO TRUMP IN
THE NEGOTIATIONS OF THE TPP AND
ALSO IN THE NORTH AMERICAN FREE
TRADE AGREEMENT, AND A MAJOR
CHUNK OF THAT HAS TO DO WITH
INTELLECTUAL PROPERTY
PROVISIONS, MANY OF WHICH HAVE
BEEN SUSPENDED.
THAT MEANS THEY WILL NOT COME
INTO FORCE WHEN TPP COMES INTO
FORCE.
BUT IF AT SUCH TIME THE UNITED
STATES WANTS BACK IN, JAPAN AND
AUSTRALIA HAVE SIGNALED TO PUT A
FLAG DOWN THAT WE WILL PUT THOSE
BACK IN.

Steve says GOTCHA.
YOU TWO MAY BE ON SIDE FOR THIS
THING, BUT THAT DOESN'T MEAN
THERE IS UNANIMITY ACROSS THE
COUNTRY ON THIS.
COLIN ROBERTSON IS SMILING.
MAYBE HE'S ANTICIPATING WHERE
I'M GOING NEXT HERE. I DO WANT
TO READ THIS FROM THE CANADIAN
PRESS AS THEY REPORT THE
POSITION OF, LET'S BRING IT UP, SHELDON...

A quote appears on screen, under the title "Headed the wrong way." The quote reads "Flavio Volpe of the Auto Parts Manufacturers' Association said this agreement moves Canada in the exact opposite direction of where its most important customer and powerful next-door neighbour is headed –right in the midst of sensitive negotiations.
He said the U.S. is pushing for a new NAFTA that increases domestic content requirements, and keeps Chinese parts out of North America –but the revamped TPP deal moves Canada and Mexico the opposite way, reducing local requirements and letting more product from non-TPP countries like China into the supply chain.
'This could not be a dumber move at a more important time,' Volpe said in an interview."
Quoted from Andy Blatchford, The Canadian Press. January 23, 2018.

Steve says OKAY, COLIN
ROBERTSON. YOUR VIEW ON THAT?

The caption changes to "Colin Robertson, @robcolin."

Colin says WELL I
THINK THAT THERE ARE CERTAIN
SEGMENTS PARTICULARLY OF LABOUR
THAT HAVE NEVER LIKED TRADE
AGREEMENTS.
IF YOU GO BACK TO THE 1965 AUTO
PACT BETWEEN CANADA AND THE
UNITED STATES, THERE WAS
OPPOSITION THERE.
BUT THE LABOUR UNIONS IN THE
AUTO INDUSTRY, IT HAS BEEN A NET
WIN FOR CANADA, THESE TRADE
AGREEMENTS.
I THINK OPENING UP TO ASIA...
REMEMBER, THERE'S TRADE-OFFS ON
ALL SIDES.
SO I DON'T THINK THIS IS GOING
TO HANDICAP THE CANADIAN
INDUSTRY BECAUSE THEY'RE ALREADY
DEALING WITH CHALLENGES AROUND
ROBOTICS AND ARTIFICIAL
INTELLIGENCE.
BUT THAT... TO TURN IT AROUND.
THAT'S ALSO I THINK WHERE CANADA
IS INCREASINGLY STRONG.
THE FACT THAT G.M. HAS CITED
THEIR IN... SITED THEIR
INNOVATION CENTRE SOUTH OF
TORONTO, IT'S BECAUSE THEY SEE
WHAT CANADA PROVIDES ON THE
INNOVATION FRONT IS SOMETHING
THEY CAN'T GET OTHER PLACES IN
THE WORLD.
SO I THINK THAT'S A PRETTY
NARROW VIEW OF THIS TRADE
AGREEMENT.
THERE ARE TRADE-OFFS.
IF THE GOVERNMENT, AS WE'VE DONE
BEFORE, GOVERNMENT WILL OFTEN
LOOK TO PROVIDE ADJUSTMENT IF
THERE HAPPENS TO BE BUT I THINK
ALL IN ALL THIS IS A GOOD DEAL
AND MR. FLAVIO OVERSTATES THE
CHALLENGE.
I AM CONVINCED OUR AUTO INDUSTRY
AND THE WORKERS IN IT WILL
CONTINUE TO SURVIVE.
ONE OF THE HEAD OF THE PARTS
INDUSTRY, LINAMAR, LINDA
HASENFRATZ SAYS SHE THINKS HER
COMPANY WILL DO WELL.
SHE HAS INVESTED IN HER COMPANY.
AND THIS HAS WORKERS THE KIND
MR. FLAVIO IS TALKING ABOUT AND
MR. VOLPE.

Steve says THIS IS NOT AN
UNAMBIGUOUS QUOTE.

Mark says IT'S A
TECHNICAL PROBLEM.
WHAT HAPPENED UNDER THE OBAMA
ADMINISTRATION, THE BIG ASK FOR
JAPAN ON RULES OF ORIGIN, WHICH
IS THE AMOUNT OF NORTH AMERICAN
CONTENT THERE IS IN A PRODUCT OR
PART THAT'S INCLUDED IN A CAR,
IN NAFTA ESSENTIALLY IT'S 62.5 percent.
IN THE TPP, THE ORIGINAL TPP,
BEFORE WE DROPPED A COUPLE
PROVISIONS AND CALLED IT
COMPREHENSIVE, BUT LEAVE THAT
ASIDE, THE ORIGINAL TPP DROPPED
THAT TO ABOUT 45 percent.
ONE OF THE BIG ASKS FOR DONALD
TRUMP IN THE CONTEXT OF NAFTA
RENEGOTIATION IS TO RAISE IT TO
85 percent AND HAVE A SECONDARY TEST...

Steve says 85 percent AMERICAN?

Mark says 85 percent NORTH AMERICAN WITH A
SECONDARY TEST THEY PROPOSED,
50 percent U.S.
I PERSONALLY THINK THAT'S JUST A
NEGOTIATING PLOY.
A LOT OF PEOPLE ARE TAKING THAT
VERY SERIOUSLY.
WHAT YOU HAVE IS A SITUATION
WHERE NEGOTIATING WITH THE
AMERICANS WHO WANT TO RAISE IT
TO 85 percent IN THE CONTEXT OF NAFTA
AND WE'RE SIGNING ONTO AN
AGREEMENT WHERE WE'VE LOWERED IT
TO 45 percent IN THE CONTEXT OF THE
TPP...

Steve says DO WE LOOK LIKE
WE'RE SUCKING AND BLOWING AT THE
SAME TIME?

Mark says WE DO.
WE'RE A COUNTRY OF 36 MILLION.
AND PUTTING IN ALL OF OUR
NATIONAL PRIDE ASIDE, COMPANIES
FROM JAPAN AND KOREA ARE NOT
INVESTING IN CANADA TO PRODUCE
CARS TO SELL TO 36 MILLION
CANADIANS.
THEY'RE PRODUCING CARS TO SELL
TO 360 MILLION AMERICAN MARKET.
AND SO ESSENTIALLY IF THOSE
COMPANIES WANT TO DO THAT,
THEY'RE GOING TO HAVE TO DECIDE
WHETHER THEY'RE GOING TO COMPLY
WITH THE NAFTA RULES AND THEY'RE
RAISED.
AS A COMMERCIAL MATTER IT'S
PERHAPS NOT AS IMPORTANT AS
FLAVIO, WHO I KNOW WELL.
WE TEND TO MAKE A LOT OF RULES
OF ORIGIN, ALMOST LIKE A
RELIGION.
THEY'RE NOT AS SIGNIFICANT
TODAY, STEVE, AS THEY WERE WHEN
WE NEGOTIATED THE ORIGINAL
CANADA-U.S. FREE TRADE
AGREEMENT.

Steve says WHY NOT?

Mark says BECAUSE TARIFFS HAVE COME
DOWN SIGNIFICANTLY.
BECAUSE OF THAT MANY COMPANIES
NOW CHOOSE NOT TO EVEN BOTHER
FILLING OUT THE PAPERWORK AND
FORMS TO SHOW THAT THEY'RE
COMPLYING WITH THE RULES AS THEY ARE.

Steve says BUT COLIN ROBERTSON,
HAVING SAID THAT, YOU KNOW, IF
WE'RE PREPARED TO PUT A SMALLER
NUMBER, AS IT RELATES TO NORTH
AMERICAN CONTENT IN OUR DEAL
WITH THESE COUNTRIES WE'VE JUST
SIGNED ON WITH, THE 11, AND YET
SOMEHOW WE HAVE A DIFFERENT
NUMBER AS IT RELATES TO
CANADA-U.S.-MEXICO FOR A RENEWED
NAFTA, IS THAT GOING TO CAUSE
PROBLEMS FOR OUR NAFTA
NEGOTIATIONS?

The caption changes to "Meanwhile in Montreal."

Colin says I DON'T THINK SO.
AS MARK SAID AND AS CHRYSTIA
FREELAND HAS SAID, 40 percent OF THE
TRADE BETWEEN CANADA AND THE
UNITED STATES GOES... DOESN'T GO
WITH NAFTA.
THE CHALLENGE THERE IS THE
PAPERWORK AT THE BORDER.
AND AS MARK SAID, COMPANIES JUST
SAY, IT'S EASIER FOR US TO PAY
THE VERY SMALL DUTY, THE 2.5 percent.
SO I DON'T THINK THAT'S AN
ISSUE.
WHAT IS IMPORTANT ON THE
CANADA-U.S. FRONT IS THAT
BENEATH THE NAFTA NEGOTIATIONS,
THERE'S A TREMENDOUS AMOUNT
GOING ON TO TRY TO MAKE THAT
ACCESS ACROSS THE BORDER EASIER,
TO HAVE LIKE A SINGLE PORTHOLE
SO THE SAME INFORMATION THAT THE
U.S. WANTS, CANADA WANTS, AND
THEN WE SHARE THE INFORMATION.
THAT'S HOW WE'LL SOLVE ISSUES
LIKE THIS.
AND AS FOR THE INTELLECTUAL
PROPERTY, ONE OF THE THINGS
WE'RE ALSO LOOKING AT NOW, AND
THIS IS PART OF WHAT WE'RE DOING
AT THE NAFTA TABLE, IS SAYING,
WELL, LOOK.
MAYBE WE CAN HAVE A HIGHER
THRESHOLD BECAUSE WHAT WE'RE
DOING NOW IS WE'RE SIMPLY
LOOKING AT WHERE IS THE PIECE
MANUFACTURED?
SO IT COMES OUT OF CHINA.
WHAT ABOUT THE INTELLECTUAL
PROPERTY GOES INTO THIS?
THIS GOES BACK TO MARK'S
ORIGINAL OBSERVATION.
THE INTELLECTUAL PROPERTY FOR SO
MUCH STUFF, WHETHER WE'RE
TALKING BARBIE DOLLS OR AUTO
PARTS IS HERE IN NORTH AMERICA,
THE iPHONE OR WHATEVER.
THE INTELLECTUAL PROPERTY FOR
THAT, THE CREATIVITY, THE PARTS
IN IT MAY COST 30 dollars BUT THE THING
ITSELF COSTS 300 dollars BECAUSE OF THE
INTELLECTUAL PROPERTY AND THAT'S
NORTH AMERICAN-MADE.

Mark says THE ONLY THING
I WOULD ADD TO THAT IS THAT I
THINK THAT'S LARGELY TRUE.
THE WAY I THINK IT'S GOING TO
PLAY OUT AT THE NEGOTIATING
TABLE IS CANADA WILL TRY TO USE
IT TO ITS ADVANTAGE.
WE'LL SAY SOMETHING LIKE, WE
CAN'T GIVE YOU THE 85 percent YOU'RE
ASKING FOR BECAUSE WE JUST
AGREED OVER HERE TO THE 45,
WHICH WILL ANNOY THE AMERICANS
TO SOME EXTENT.
I DON'T THINK THEY WILL BE MOVED
BY IT, BUT I THINK IT'S A
RHETORICAL QUIVER THAT WE'LL
KEEP IN WHATEVER IT IS... AN
ARROW WE'LL KEEP IN OUR QUIVER.
I THINK WE'LL KEEP THAT FOR OUR
SIDE.
THAT'S ONE THING.
ON THE OTHER HAND, I THINK THAT
THE AMERICANS, MR. TRUMP, MY
GUESS IS PRETTY SERIOUS ABOUT
RAISING THAT NUMBER BEYOND 62 percent.
SO WHILE I THINK INCLUDING NEW
RULES OF WHAT WE CALL TRACING
THAT WILL INCLUDE INTELLECTUAL
PROPERTY AND ALL OF THAT, WE'RE
NOT GOING TO GET OUT OF THIS
WITH AN ARITHMETIC KIND OF QUICK
FIX AND SLIGHT OF HAND.
THEY WILL WANT TO SEE IN A
MEANINGFUL WAY THAT NUMBER GO
FROM 62.5 TO 85, REGARDLESS OF
HOW YOU CALCULATE IT.
THE SIGNIFICANCE OF THAT IS FOR
THE FIRST TIME IN MONTREAL
CANADA IS ENGAGING ON THE POINT.
UP UNTIL NOW WE SIMPLY SAID, RED
LINES, RED LINES, POISON PILL,
AND REFUSED TO NEGOTIATE.
WE'RE NOW NEGOTIATING AND I
THINK THAT'S A GOOD THING.

Steve says WELL, AS LONG AS
YOU'VE GOT US IN MONTREAL NOW,
LET'S CONTINUE TO DISCUSS WHAT'S
HAPPENING MEANWHILE IN MONTREAL.
THE FOREIGN AFFAIRS MINISTER,
COLIN, CHRYSTIA FREELAND, HAS
SAID SHE IS BRINGING SOME QUOTE,
UNQUOTE, CREATIVE NEW PROPOSALS
TO THE TABLE IN HOPES OF
BREAKING THE LOGJAM.
ANY IDEA WHAT SHE HAS UP HER
SLEEVE THAT YOU CAN TELL US ABOUT?

Colin says JUST AS WE
WERE DISCUSSING, THE IDEA OF
TAKING, FOR EXAMPLE, ON THE
RULES OF ORIGIN.
LET'S INCLUDE THE INTELLECTUAL
PROPERTY.
WE'RE WORKING WITH INDUSTRY,
WE'RE WORKING WITH THE UNION,
MR. VOLPE, ON THE AMERICAN SIDE.
REMEMBER, THE NORTH AMERICAN
AUTO INDUSTRY, THE MOST TRADED
COMMODITY IN NORTH AMERICA IS
THE AUTO.
THAT'S HARDLY THE RULES OF
ORIGIN DEBATE, WHICH IS ONE OF
THE BIG ISSUES.
BUT THE INDUSTRY, THE BIG 3, THE
PARTS MANUFACTURERS, THE UNIONS
ARE ALL ON THE SAME SIDE.
THEY SAY DO NO HARM.
THIS THING IS ACTUALLY WORKING.
THAT'S PART OF WHAT WE'RE
TALKING ABOUT.
WE'RE ALSO TRYING TO REACH THAT
STANDARD MR. TRUMP HAS TALKED
ABOUT, AND I THINK BY LOOKING AT
THE ALGORITHMS AND BY INCLUDING
DIFFERENT THINGS, THIS IS PART
OF THE CREATIVE SIDE RATHER THAN
JUST A RED LINE, WE'RE SAYING
LET'S INCLUDE ALL THE VALUE,
AGAIN, THAT INTELLECTUAL
PROPERTY PIECE.
THE MEXICANS HAVE COME UP ON
ANOTHER ISSUE OF THE SUNSET
CLAUSE AFTER FIVE YEARS OF
REVIEWING IT.
INITIALLY WE SAID, UH-UH,
MACNAUGHTON SAID, IF A MARRIAGE
IS ONLY GOING TO LAST FIVE
YEARS, THERE WILL BE A LOT MORE
DIVORCES.
PEOPLE AFTER FIVE YEARS WILL
HAVE SECOND THOUGHTS.
AFTER FIVE YEARS WE'LL DO OUR
REVIEW.
THAT'S NOT A BAD THING.
ONE OF THE BIGGEST INNOVATIONS
IN THIS AND THE TPP IS THE
DIGITAL ECONOMY WHICH TAKES UP
30, 40 percent AND IS GROWING.
WE'RE TAKING INTO ACCOUNT HUMAN
BEINGS ARE INNOVATIVE.
THAT'S A GOOD THING.
THAT'S WHAT TRADE AGREEMENTS
SHOULD BE ABOUT.
THE DISPUTE SETTLEMENT SIDE,
WE'RE LOOKING AT, OKAY, MAYBE WE
CAN MANAGE IT DIFFERENTLY.
WE'LL COME UP WITH A DIFFERENT
APPROACH TO IT.
SO I THINK WE'VE COME TO THE
TABLE IN MONTREAL WITH CREATIVE
IDEAS ON THE BIG 3 ISSUES.
GOVERNMENT PROCUREMENT.
ON THIS ONE, I WOULD TURN IT
BACK TO THE PROVINCES AND
STATES.
WE HAD A PROBLEM LIKE THIS IN
2009 WHEN PRESIDENT OBAMA CAME
IN AND WANTED TO SEND A LOT
OF... SPEND A LOT OF MONEY ON
INFRASTRUCTURE, HALF A TRILLION
DOLLARS.
MR. TRUMP WANTS TO SPEND A
TRILLION.
THAT WOULD BE GREAT.
WE COULDN'T WORK IT OUT ON THE
FEDERAL LEVEL.
PREMIER WALL MET WITH THE
GOVERNORS AND WANTED TO MAKE
THEIR BUDGETS GO AS FAR AS,
BECAUSE THE PROVINCES AND STATES
DO THE INNOVATION AND THE
CONSTRUCTION, AND THEY FIGURED
OUT A RECIPROCITY DEAL THAT
LASTED FIVE YEARS.
THE PREMIERS OF ONTARIO AND
QUEBEC TODAY ARE TALKING WITH
THE GOVERNORS IN WISCONSIN, NEW
YORK, ILLINOIS, AND OTHERS.
CAN WE WORK THIS OUT?
I THINK THIS IS HOW WE'LL DEAL
WITH IT.
WE'LL LOOK AT THINGS A LITTLE
DIFFERENTLY BUT I DO BELIEVE ALL
OF THIS STUFF IS SOLVABLE.

Steve says MARK, WHAT OTHER
COMPONENTS OF THE NAFTA DEAL ARE
UNDER NEGOTIATION IN MONTREAL?

The caption changes to "Mark Warner, @maawlaw."

Mark says I THINK THOSE ARE THE THREE
MAJOR ONES.
ON THE DISPUTE SETTLEMENT, I
THINK IT'S GOOD WE'RE ENGAGING.
IN MY JUDGMENT, IT'S THE VERY
FIRST TIME WE HAVE COME TO THE
TABLE WITH A SERIOUS ATTITUDE OF
NEGOTIATING.
ON THE DISPUTE SETTLEMENT, WHAT
WE'VE PROPOSED IS A BIT CUTE AND
IT WON'T BE LOST ON THE
AMERICANS.
THE THREE DIFFERENT DISPUTE
SETTLEMENT MECHANISMS IN THE
NAFTA.
ONE OF THEM HAS TO DO WITH
INVESTOR STATE DISPUTES.
WHAT CANADA HAS ESSENTIALLY
SAID, OKAY, YOU AMERICANS WANT
TO OPT IN.
IF AN INVESTOR WANTS TO SUE THE
UNITED STATES GOVERNMENT OR
STATE, YOU CAN EITHER OPT IN...
THE GOVERNMENT HAS THE
OPPORTUNITY OF OPTING IN.
AND CANADA HAS SAID, YOU KNOW WHAT?
MEXICO AND US, WE'RE JUST GOING
TO NEGOTIATE OUR OWN INVESTOR
STATE DISPUTE SETTLEMENT SYSTEM
AND WE WON'T BOTHER HAVING ONE
WITH YOU.
AND THAT'S AN ATTEMPT TO PLAY ON
SOME OF THE DIVISIONS WITHIN THE
UNITED STATES ABOUT THE BUSINESS
COMMUNITY THAT REALLY LIKES
INVESTOR STATE AND THE UNITED
STATES TRADE REPRESENTATIVE,
ROBERT LIGHTHIZER, WHO
ABSOLUTELY HATES IT.
THAT'S KIND OF LIKE PUTTING THE
CAT AMONG THE PIGEONS THERE.
THE REAL FEATURE IS CHAPTER 19.
THAT'S THE ONE WHERE THE TRADE
REPRESENTATIVE, LIGHTHIZER,
REALLY WANTS TO SEE IT GONE.
THAT'S THE AMERICAN ASK.
WE'RE NOT REALLY ENGAGING ON
THAT POINT TODAY.
NOT THAT WE SHOULD.
I THINK WE OUGHT TO HAVE A MORE
INFORMED DISCUSSION IN CANADA IF
CHAPTER 19 HAS GIVEN US
EVERYTHING WE THINK IT HAS.
THOSE ARE THE THREE THINGS,
COLIN LAID THEM OUT.
THE IMPORTANT PART IS MOVEMENT
AND ENGAGEMENT.
MY GUESS IS IF THE UNITED STATES
CAN SEE SOME ENGAGEMENT ON THE
PART OF MEXICO AND CANADA, THEN
THAT'S GOING TO LOWER THE VOLUME
AND THE INCLINATION TO PULL THE
TRIGGER.

Steve says LET ME PUT ANOTHER
PIECE OF THE PUZZLE HERE ON THE
TABLE.
THIS IS BARRY McKENNA WRITING IN
THE GLOBE AND MAIL, WHO HAD
THIS TO SAY JUST A FEW DAYS AGO...

Another quote appears on screen, under the title "Gotta play by the rules." The quote reads "Canada is already laying the groundwork for life without NAFTA should it come to that. Ottawa recently launched a sweeping trade case that accuses the United States of flagrantly violating World Trade Organization (WTO) rules in its handling of almost 200 trade investigations going back decades. Among other things, Ottawa argues that the United States is breaking WTO rules in the way it handles anti-dumping and subsidy cases, including continuing disputes involving Canadian lumber, newsprint and Bombardier jets. It's also a veiled warning that Ottawa intends to make the United States live by WTO rules, regardless of what happens to NAFTA."
Quoted from Barrie McKenna, The Globe and Mail. January 23, 2018.

Steve says COLIN, TELL US HOW
ANY OF THAT IS AFFECTING THESE
NAFTA TALKS IN MONTREAL AS WELL.

The caption changes to "Complaints department."

Colin says WELL, I
THINK THIS IS SMART.
THIS WAS SOME TIME IN THE MAKING.
WE'RE BASICALLY SAYING THAT THE
U.S. TRADE REMEDY SYSTEM NEEDS
TO BE LOOKED AT BECAUSE IT'S NOT
WHAT WE'RE SEEING.
I DON'T THINK IT'S IN COMPLIANCE
WITH THE WTO OBLIGATIONS.
REMEMBER, THE WTO IS VERY MUCH
AN AMERICAN CREATION, LIKE ITS
PREDECESSOR WAS.
WE'VE SORT OF SERVED A VOLLEY.
WE'RE HOPING OTHER COUNTRIES
WILL COME ALONG AND SAY, YES...
WHAT WILL HAPPEN AS A RESULT,
WE'LL WAIT AND SEE.
BUT I THINK IT'S GOOD THAT
CANADA AND OTHER COUNTRIES ARE
SAYING TO THE UNITED STATES,
YOU'VE GOT TO LIVE UP TO YOUR
OBLIGATIONS AS WELL.
I JUST WANT TO GO BACK TO ONE
THING THAT MARK SAID ABOUT
INVESTOR STATE.
LOOK, WE INCLUDED THAT IN THE
NAFTA.
IT'S THE FIRST TIME IT WAS DONE,
AT THE AMERICAN BEHEST.
IT WAS AMERICAN ENTERPRISE THAT
WAS CONCERNED ABOUT
NATIONALIZATION IN MEXICO.
THAT'S NOT GOING TO HAPPEN.
MEXICO REALLY HAS ADVANCED
FORWARD.
THERE'S NOW MORE MIDDLE CLASS IN
MEXICO, 44 MILLION, THAN THERE
ARE CANADIANS.
NAFTA HAS BEEN A GREAT SUCCESS
STORY IN GEOPOLITICAL TERMS,
WHICH IS THE DRIVING FORCE
BEHIND GEORGE H.W. BUSH'S
CREATION OF THAT.
I THINK THAT ONE, WE'LL LET THE
AMERICANS WORK IT OUT.
ON A LOT OF THESE THINGS, LET
THE AMERICANS... THERE'S NOW AN
INTERNAL DEBATE IN THE UNITED
STATES.
IF IT'S CANADA VERSUS THE U.S.,
THE ONLY TIME WE DO REALLY WELL
IS WHEN WE PLAY ON ICE.
WHEN IT'S AMERICANS VERSUS
AMERICANS, WHICH IS WHERE THIS
DEBATE IS TODAY, THEN I THINK
WE'RE BETTER OFF.
WHICH IS WHY, TO GO BACK TO
SOMETHING ELSE YOU SAID AT THE
OUTSET, ONE OF THE MOST
REMARKABLE STATEMENTS OUT OF
DAVOS WAS PRESIDENT TRUMP SAID
MAYBE WE'LL RECONSIDER GOING
INTO THE TPP, BECAUSE IT WAS HE
WHO PULLED OUT OF IT.
REMEMBER, THE TPP TOOK OFF
BECAUSE IT WAS A PRESIDENT OBAMA
INITIATIVE.
THE UNITED STATES IS NOT WHERE
IT NORMALLY IS.
BUT IT SEEMS THAT MR. TRUMP IS
SLOWLY BUT SURELY SORT OF MOVING
BACK TO A DIFFERENT POSITION,
WHICH IS MUCH MORE CONSISTENT
WITH WHERE AMERICAN
ADMINISTRATIONS SINCE THE SECOND
WORLD WAR HAVE BEEN.

Mark says CAN I JUMP IN ON THE WTO POINT.
WE HAVE A NUMBER OF CASES IN THE WTO.
WE'VE WON ON SOMETHING CALLED
SUPER CALENDAR PAPER.
WE HAVE TWO ON SOFTWOOD LUMBER
AND BRING ONE ON BOMBARDIER.
IN ADDITION TO ALL OF THAT, WHAT
HAPPENED THE LAST COUPLE OF
WEEKS WAS WHAT I CALL OMNIBUS
COMPLAINT.
IT WENT TO THE HEART OF THE
TRADE REMEDY SYSTEM IN THE
UNITED STATES.
WHEN THE GOVERNMENT WAS
CONFRONTED WITH THAT, THEY SAID,
NO, THAT REALLY WAS SOFTWOOD
LUMBER WE'RE GETTING AT.
NO.
THAT'S THE PROBLEM WITH THAT
APPROACH, IT SEEMS TO ME.
BECAUSE THERE'S A BILATERAL
CONSENSUS, WHETHER WE LIKE IT OR
NOT, AROUND THE U.S. TRADE
REMEDY SYSTEM.
SO BRINGING AN ACTION LIKE THAT,
WHICH BASICALLY 8 PAGES OF
COMPLAINTS TO GO TO THE HEART OF
THE AMERICAN TRADE REMEDY SYSTEM
AND 20 PAGES LISTING EVERY OTHER
COUNTRY IN THE WORLD, HALF OF
THEM INCIDENTS INVOLVING CHINA,
YOU'LL NOTE IN THE PRESIDENT'S
SPEECH THIS MORNING IN DAVOS, HE
REALLY NOT SO SUBTLY INDICATED
HE HAS A PROBLEM WITH CHINA.
NOT FOR THE FIRST TIME.
SO I DON'T THINK THIS IS A SMART
MOVE.
INTERESTINGLY ENOUGH, THERE WAS
A PRODUCT... PRESIDENT TRUMP
INTRODUCED AN ACTION ON
INVOLVING IMPORTS OF SOLAR CELLS
INTO THE UNITED STATES AND IT
APPLIES TO KOREA.
THE RECOMMENDATION COMING FROM
THE UNITED STATES INTERNATIONAL
TRADE COMMISSION WAS THAT CANADA
SHOULD BE EXEMPTED FROM THAT.
CANADA WAS INCLUDED IN THAT.
AND WE'RE INCLUDED IN THAT I
THINK IN PART BECAUSE OF THE
NONSENSE WE DID WITH THAT
OMNIBUS CHALLENGE IN THE WTO.
THE PROBLEM WITH THE CANADIAN
GOVERNMENT'S APPROACH, IT SEEMS
TO ME, IS WE ARE A MUCH SMALLER
COUNTRY.
YOU WANT TO GET INTO A FIGHT
WITH THE UNITED STATES WHICH IS
TEN TIMES OUR SIZE, THEY HAVE
BIGGER STICKS TO HIT US WITH.

Steve says DON'T BRING A KNIFE
TO A GUN FIGHT.

Mark says EVERY SINGLE
THING THEY MENTIONED IN THAT
COMPLAINT COULD HAVE BEEN
WRAPPED UP IN THE ALREADY TWO
EXISTING SOFTWOOD LUMBER
COMPLAINTS WITHOUT CITING HALF A
DOZEN OR 20 PAGES OF CASES
INVOLVING CHINA.

Steve says GOTCHA.

Mark says UNNECESSARY.

The caption changes to "Connect with us: @theagenda, TVO.org, Facebook, YouTube, Periscope, Instagram."

Steve says SOMETHING TELLS ME
WE COULD GO ON MUCH LONGER BUT
SADLY THE CLOCK HAS RUN OUT ON
US. I DO WANT TO THANK BOTH OF
YOU VERY MUCH FOR GETTING US UP
TO SPEED ON NAFTA... WHAT ARE
YOU CALLING IT NOW?
IT'S NOT TPP ANYMORE.

Colin says COMPREHENSIVE AND PROGRESSIVE.
THAT'S A CANADIAN INITIATIVE.

The caption changes to "Producer: Gregg Thurlbeck, @GreggThurlbeck."

Steve says THERE WE GO.
VERY GOOD. MARK WARNER FROM
MAAW LAW, COLIN ROBERTSON, V.P.
AND FELLOW AT THE CANADIAN
GLOBAL AFFAIRS INSTITUTE.
THANKS SO MUCH FOR JOINING US
ON TVO TONIGHT.

Colin says THANKS,
STEVE. THANKS, MARK.

Mark says THANKS FOR
HAVING ME.

Watch: Trade on the Table