NAFTA

Climate Change in NAFTA

Tue, August 8, 2017 No Comments by Peter Clark

Climate Change in NAFTA

The July 17 U.S. proposals for the Environment chapter in NAFTA 2.0, reflect the final TPP text. The objective is exporting U.S. standards to the rest of the world. The TPP text is silent on climate change.

President Trump’s decision to walk away from The Paris Accord could give the U.S. stakeholders a significant competitive advantage over competitors in countries with CO2 control/reduction regimes.

Canada should pursue its own objectives – and reject the underwhelming U.S. objectives. The CETA text would be much more relevant in negotiating an Environment chapter.

Canada’s hope to get climate change into NAFTA could prove difficult

The Canadian Press
By Mia Rabson
August 8, 2017

OTTAWA — U.S. President Donald Trump’s stance on climate change may end up being the biggest stumbling block in NAFTA talks when it comes to the environment.

Prime Minister Justin Trudeau reiterated Friday during a tour of eastern Ontario that he wants climate change, reducing emissions and moving to a low-carbon economy to be written into the new NAFTA when Canada, the U.S. and Mexico begin renegotiating the deal later this month.

“We are certainly looking for a better level playing field across North America on environmental protections,” Trudeau said.

However with Trump withdrawing the U.S. from the Paris climate change agreement, referring to climate change as a “hoax” and pledging to return the U.S. coal industry to its glory days, the White House and the Canadian government are pretty far apart on many environmental issues.

Even getting the words “climate change” into the agreement could be a struggle.

A government official speaking on background told The Canadian Press last week, that on the environment side, Canada will be looking to the free trade agreement recently signed with Europe, known as the Comprehensive Economic and Trade Agreement, or CETA, as a template.

Foreign Affairs Minister Chrystia Freeland has referred to CETA as the gold standard of trade agreements when it comes to the environment and said she wants to push CETA’s environment chapter with the U.S. and Mexico on NAFTA.

However, several trade experts say the United States is going to be pushing for the environment chapter in NAFTA to be more closely aligned with the now-defunct Trans Pacific Partnership or TPP.

One key difference?

CETA mentions climate change. TPP does not.

“CETA is more relevant to Canada and the TPP is more relevant to the United States,” said Peter Clark, an international trade expert and president of the Ottawa firm Grey, Clark, Shih and Associates.

Several American states are stepping up to maintain their climate change commitments despite the federal government’s pullback, however NAFTA isn’t being negotiated at the state level.

Tim Gray, executive director of Environmental Defence, said whether Canada can push the U.S. into adding climate change protections and mitigation to NAFTA may depend on how influential state governments can be in the talks.

“Major economies like California and northeastern states that already have various forms of carbon pricing may have a real interest in this,” he said.

Canada’s coming national price on carbon adds further fuel to the debate, as some will be looking for Canadian industries affected by the carbon price to get protections, maybe even in the form of a carbon tax applied at the border on goods coming from places in the U.S. where there is no such policy.

Clark said mischievously he recommends Canada seek a border adjustment carbon tax at best, but at a bare minimum he believes Canada should require the Paris Agreement be added to a list of multilateral environment agreements to which NAFTA countries must belong.

In its list of objectives for NAFTA released last month, the Office of the United States Trade Representative said it wants NAFTA to require signatories to adopt and uphold their obligations under several such pacts, including the Convention on International Trade in Endangered Species of Wild Fauna and Flora.

“I think Canada should immediately add the Paris accord to that list,” said Clark.

CETA also has what it is known as the “precautionary principle,” which means a party proposing a development or an action has to prove it won’t harm the environment, even if only some, not all, scientists agree it could be harmful.

In CETA there is also a provision which says that the costs of pollution are borne by the polluter and requires Canada and Europe to prioritize trade in environmental goods and services related to renewable energy and co-operate on climate change adaptation and mitigation. It also makes clear that foreign companies cannot claim compensation when they believe a government’s environmental regulations or policies harm their business.

Canada has been subject to several such challenges under NAFTA and lost many of them, paying millions in compensation.

TPP, on the other hand, includes a provision to allow countries to suspend trade benefits with a country that doesn’t respect its environmental responsibilities.

One area where both Canada and the United States agree is in bringing the environment chapter into the main NAFTA papers. In 1994 it was included as a separate annex.

Including it as its own chapter in NAFTA would make whatever environmental obligations it puts forward subject to the agreement’s dispute resolution provisions.

However, Clark said Canada cannot really insist that environmental provisions are make-or-break requirements.

“I can’t see us walking away over it,” he said. “It’s important, but what kind of leverage do they have?”

If Canada says it will leave the table unless Trump agrees to put climate change into the agreement, he’s likely to say ‘fine, go ahead’, said Clark.

“This is not really a typical trade negotiation,” he added.

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Don’t drink the Kool-Aid when it comes to benefits of NAFTA modernization: Peter Clark

Wed, May 24, 2017 No Comments by Peter Clark


Source: BNN

Peter Clark on BNN – May 19, 2017

 

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Little baloney in Carr’s assertion that Canada has won softwood challenges

Thu, May 18, 2017 No Comments by Peter Clark

Peter Clark consulted in softwood lumber challenges…

Little baloney in Carr’s assertion that Canada has won softwood challenges

The Canadian Press
By Andy Blatchford
May 18, 2017

OTTAWA — “There were court challenges in these other disputes. We have won them all.” — Natural Resources Minister Jim Carr on April 25.

—

Natural Resources Minister Jim Carr has been offering reassuring words as the country prepares to defend its softwood lumber industry yet again from duties imposed by the United States.

The latest round marks the fifth time in about 30 years that Canada will engage in a softwood dispute with its biggest trading partner.

“We have prevailed in the past, and we will do so again,” an optimistic Carr told reporters late last month.

He called the U.S. decision to impose countervailing duties of about 20 per cent for most mills “unfair” and “punitive.”

“Our government disagrees strongly with this decision,” he said. “It is unfounded, and we will vigorously fight for the interests of the Canadian softwood lumber industry, its workers, and their communities.”

Carr also insisted that Canada has won every court challenge of the past.

Has Canada indeed been victorious in every court challenge linked to softwood trade disputes with the U.S.?

Spoiler alert: The Canadian Press Baloney Meter is a dispassionate examination of political statements culminating in a ranking of accuracy on a scale of “no baloney” to “full of baloney” (complete methodology below).

This one earns a rating of “a little” baloney. Here’s why.

THE FACTS

The Trump administration triggered the latest softwood skirmish by imposing retroactive duties on Canadian lumber.

For decades, the U.S. has argued that Canada’s lumber producers are unfairly subsidized through cheap access to public land. The on-again, off-again dispute has led to duties, court battles and periods of peace with the help of temporary agreements.

Cross-border lumber quarrels are older than Canada itself and date back to the first half of the 19th century, Carr said recently.

The minister insists Canada has been victorious in all the court challenges in the “contemporary era” of the lumber disputes that began in the 1980s.

This time around, he says the federal government will tell their U.S. counterparts that Americans will also feel the pain from the border duties because jobs in both countries depend on the free flow of goods and services.

Carr has confirmed Ottawa is prepared to file challenges through the North American free trade agreement and the World Trade Organization, if necessary.

“We will look at our options, and we certainly would not exclude the possibility,” he said.

WHAT THE EXPERTS SAY

Trade experts say while the history of the softwood-lumber wars is long and complicated, they agree that Canada has repeatedly come out on top since the 1980s.

Some note, however, that the victories do not mean Canada came through completely unscathed.

Naomi Christensen, a senior policy analyst at the Canada West Foundation think tank, said that over the years Canada has had considerable success in appealing U.S. actions in front of NAFTA and WTO panels.

“What may actually be more accurate is to say the U.S. has never won,” said Christensen, who noted, for example, that panels have called on the U.S. to lower or lift its duties on Canadian lumber a number of times.

“It’s a little more complex than just a court case because it’s (presented) to trade panels, and so the rulings are typically not just ‘yes-Canada, no-U.S’.”

She noted that less than a decade ago, while the most-recent softwood lumber agreement was in place, the U.S. found some success after filing disputes with the London Court of International Arbitration over how Canada was applying the deal.

Christensen said the court ruled that some provinces were applying the agreement correctly and a couple were not. However, she noted that these rulings came while an agreement was in place.

Peter Clark, a trade strategist involved in Canada-U.S. Free Trade and NAFTA negotiations, said Canada has had a winning record — but it depends where you look.

Clark said Canada has had lots of success with NAFTA challenges.

“They’ve won a lot of them,” he said, adding that it explains why the U.S. lumber industry wants to get rid of the Chapter 19 dispute settlement tool in the agreement.

“They figure it doesn’t work all that well for them, so they would just as soon get rid of it.”

But he says some WTO disputes have had mixed results for Canada.

Colin Robertson, vice-president at the Canadian Global Affairs Institute, said his impression is that Canada won most disputes that came before the WTO and NAFTA.

However, he added that even legal wins won’t solve the decades-long problem — Canada must still negotiate with the U.S. to reach a resolution.

“There is the judicial route, but what counts in terms of softwood lumber are the politics,” said Roberston, a former member of Canada’s NAFTA negotiating team.

“The (legal) outcomes give us moral suasion, but ultimately political solutions, certainly in the case of lumber, are what we have to arrive at.”

THE VERDICT

Overall, experts say Canada has generally prevailed through four rounds of the softwood lumber dispute with the U.S., even if the Americans saw some less significant success along the way.

For that reason, Carr’s statement rates “a little” baloney.

METHODOLOGY

The Baloney Meter is a project of The Canadian Press that examines the level of accuracy in statements made by politicians. Each claim is researched and assigned a rating based on the following scale:

No baloney — the statement is completely accurate

A little baloney — the statement is mostly accurate but more information is required

Some baloney — the statement is partly accurate but important details are missing

A lot of baloney — the statement is mostly inaccurate but contains elements of truth

Full of baloney — the statement is completely inaccurate

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