Negotiations for the North American Free Trade Agreement (NAFTA) continue to dominate the Canadian political scene, as Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland devote their energy to make sure a deal is in place prior to the election in October 2019. This comes in response to President Donald Trump’s threats to impose tariffs on Canadian auto imports should no deal be reached.
Over the past several weeks, Minister Freeland and U.S. Trade Representative Robert Lighthizer have met several times to discuss the free trade agreement and points of disagreement. This is following a tentative trade agreement which was announced between Mexico and the United States which added pressure on the Canadian Government to finalize negotiations.
The deal between the two countries may have also offered a blueprint for Canadian officials as they agreed that 75 percent of automotive content (up from the current 62.5 percent) be produced within the trade bloc to receive duty-free benefits. This has put pressure on both sides to come to an agreement as President Trump has stated that some form of trade agreement will be submitted to the U.S. Congress by month’s end.
The three areas that continue to be up for debate are the United States access to the Canadian dairy market, a cultural exemption for Canada, and the Chapter 19 dispute resolution mechanism.
The Canadian Government has created a multi-billion-dollar program to support the aluminum and steel industries following tariffs and have surmised what would happen with disruptions in the integrated automotive industry.
Should NAFTA negotiations not be resolved soon, the cost of vehicles might increase dramatically with the imposition of tariffs. This is a serious concern for fleet administrators on both sides of the border.
NAFA Fleet Management Association
http://www.nafa.org/