Vote at Commons trade committee to set pace for new NAFTA review

A contentious motion Justin Trudeaucharacterized as a "near miss" will come to a vote at the Commons trade committee Tuesday, immediately after Deputy Prime Minister Chrystia Freeland makes her case for swift passage of the implementation bill for the revised North American trade agreement.

When the committee last met on Feb. 5, Conservative MP Colin Carrie moved that six House of Commons standing committees agriculture and agri-food; industry, science and technology; natural resources; human resources, skills and development; foreign affairs and finance be invited to study Bill C-4and submit proposed amendments to the trade committee by April 2.

The motion surprised other committee members, who asked for time to consider it before voting at their next meeting. The outcome of Tuesday'svote could be critical tothe Liberal government's hopesto passthe legislation quickly.

Both Mexico and the United States have finished ratifying the new NAFTA, putting all eyes on Canada now.

The day after Carrie'smotion was introduced, the prime minister told a meeting of Canada's big city mayorsthatthere hadbeena "near miss" at committee because of some Conservatives, and urged the mayors to lobby their MPsfor quickpassage of the agreement.

"There are certainmessages that could be passed to some parties that might be playing some challenging games and around delaying NAFTA," Trudeausaid.

Liberals no longer hold a majority on this committee, or any other. If MPs from the Bloc Qubcois which voted against an earlier motion required when thisbill was introduced and the NDP vote with the Conservatives, thiscommittee motion couldpass, setting up aslower and more complexreview of the legislation.

As of Monday evening, New Democrat Daniel Blaikiewas still considering how he will vote on the motion.

Before they vote Tuesday, MPson the trade committee willhear an hour of testimony from Freeland, the government's lead minister on NAFTA's renegotiation, starting at 11:30 a.m. ET.

The deputy prime minister will be joined by Kirsten Hillman, Canada's acting ambassador in Washington, and Steve Verheul, Canada's chief negotiator.

The trade committee has scheduled a long list of stakeholder groups and trade experts to appear over the next three days.

Economic analysis not done yet

Verheul and other officials fielded questions from MPsfor two hours at the committee's last meeting.

Before the U.S. Congress ratified the agreement, itsInternational Trade Commission completed an economic analysis of the deal for legislators' consideration.It found "moderate" benefitsfrom the revised deal, based largely on a methodology that quantified "reduced policy uncertainty" about the deal's future.

Verheultold MPsthat in his view, the U.S. report has "fundamental flaws": uncertainty can't be measured quantitatively, and if that was removed from the American analysis, it projects an economic loss from the revised NAFTA, also known as the Canada-U.S.-Mexico Agreement on trade.

Conservatives want moredisclosure of theanalysis economists at Global Affairs Canada have been working on since the deal was finalized. Verheul told MPs he expected to see a draft of it following his testimony, but it has not been released inthe nearly two weeks since.

Verheul said his departmentcouldn't "go too far" until the final text became clear last December, when all three countries signed a protocol of amendment.

He said economists are trying to "come up with something that we can defend credibly" and suggested it will be more of a qualitative analysis on the enhanced regulatory co-operation and reduced barriers to trade this deal brings.

Verheul said because Canada already enjoys the economic benefits of free trade in North America, "significant new gains are not likely to appear."

MPs also asked what happens if the Opposition proposesamendments similar to what Congressional Democrats did,in return for supporting ratification.

Verheulsaidamendments at this stage would require reopening negotiations to "see if we could reestablish a balance of concessions on the basis of a new proposal put forward by us."

Canada did not seek concessions from the U.S. in return for changes Democrats wantedlast fall, Verheul said, because those changes "made the agreement better for us."

Trudeau confident of passage

Canada's premiers, as well as business groups, have called for timely ratification of the agreement. Even Canada's dairy sector, which stands to be on the losing end of this deal, had admittedthat overall, the deal is in the national interest.

On top of recent compensation for trade deals with Europe and Pacific Rim countries, dairy producers and processors are negotiating even more financial assistance,in return for taking this onefor the team, too.

Dairy's primary concern nowistiming. Arguably the most harmful concessions in the agreement are its unprecedented global export caps onmilk protein concentrates, skim milk powder and infant formula. Thelimitsphase in gradually, based on thesector's fiscal year, which beginsAugust 1.

Under questioning by the NDP's Blaikie, Verheulsaidif Canada ratifiedthe agreement after May 1, some harm from the export caps couldbe pushed into thenext fiscal year. The new NAFTA takes effect on "the first day of the third month after the last party ratifies the agreement."

Verheul reminded MPs that the Trump administration'sstatement of administrative action on the new NAFTAconfirmsit would proceed with Mexico alone if Canada does not ratify, puttingfuture tradeat risk.

"We have a strengthened agreement in relation to what we have now and we have security of access, that is something to be highly valued," he said, noting that over 70 per cent of Canada's exports go to the U.S. "I would hope that we would give that careful consideration going forward."

At the Munich Security Conference last Friday, Trudeau thanked a delegation from the U.S. Congress for its support during NAFTA'srenegotiation and ratification. The prime minister told Republican Sen. Lindsey Graham he's "very confident we have the votes."

In Canada, Parliament does not ratify trade treaties. But the federal cabinet is unlikely to informthe U.S. and Mexico that it has ratified untillaws and regulations arechanged with this bill, bringingCanada into compliance.

"Our parliamentary system is a little ... I won't say a little more complex than you guys," Trudeau joked with Graham at the start of the meeting. "It works fine, we just normally start after you guys finish your processes."