Nafta Trade Talks in 'Bread and Butter' Phase, Haven't Heated Up Yet

Parties renegotiating the North American Free Trade Agreement are making progress on "bread and butter" commerce issues here in the Canadian capital, senior Canadian and U.S. officials said Monday, but little headway on such items as how to resolve trade disputes.

Canada and Mexico have yet to hear from their U.S. counterparts on more controversial measures aimed to address parts of Nafta that the Trump administration finds most objectionable, Canadian Foreign Minister Chrystia Freeland told reporters.

She said it is standard practice to first deal with elements where parties can find common ground. And the U.S., Canada and Mexico have done just that, she said, on areas dealing with paperwork at border crossings and regulatory harmonization.

"We have been making some good progress this round on bread-and-butter economic issues, Ms. Freeland said. "These might not be the most sexy issues but they really matter" and make trade agreements work.

The U.S. chief negotiator, John Melle, said talks are "moving across the board" and at an accelerated pace, "so it's very ambitious."

Before the talks started, the U.S. said it was prepared to tackle such matters as rolling back international arbitration and other forms of dispute resolution that are in the current trade pact, according to people briefed on the U.S. strategy. The Trump administration has expressed strong reservations about such binding arbitration decisions, seeing them as an erosion of national sovereignty.

But pressure from Capitol Hill and the business community has prompted U.S. trade officials to reconsider the strategy, as r eported by The Wall Street Journal on Saturday. The proposed move away from arbitration panels, for example, alarmed some major international investors, including the energy industry, because the panels protect their interests overseas.

As a result, the proposed changes are unlikely to be introduced in a formal written proposal in this round, but are to be informally discussed with senior Canadian and Mexican officials. This could ratchet up tension as talks close in Ottawa on Wednesday.

Other hot-button issues, such as a U.S. effort to require more American-made parts in cars produced in the Nafta bloc, were unlikely to be addressed in formal proposals this round, a Canadian official said.

When asked about the lack of specific proposals, Mr. Melle said the U.S. team has "working very hard, so I don't see a problem."

Ms. Freeland will meet over dinner with U.S. Trade Representative Robert Lighthizer and Mexican Economic Minister Ildefonso Guajardo on Tuesday night, and meet further on Wednesday. She said Canada's position on some of the most contentious issues, such as dispute resolution and rules pertaining to U.S. content in automobiles, are "very clear and we look forward to having a really constructive conversation with our American and Mexican partners once actual proposals that we can respond to are on the table."

Canada said that any changes to the dispute-resolution process are not welcome, and warned about new auto-content rules that could disrupt the continental supply chain.

A representative for the Mexican negotiating team did not immediately respond to a request for comment.

Write to Paul Vieira at

(END) Dow Jones Newswires

September 25, 2017 19:08 ET (23:08 GMT)