The Wall Street Journal reports that talks to remake the North American Free Trade Agreement (NAFTA) started with an early dispute – over how to settle disputes.
Under NAFTA, the U.S., Mexico and Canada have resolved tariff conflicts by submitting them to expert panels that can sustain or overturn tariffs. The system has helped guide the trilateral relationship for 23 years.
Now the U.S. wants to do away with those dispute-resolution panels, while Canada is digging in on its insistence that they are a crucial tool for Canadian firms to use to fight tariffs imposed by its powerful southern neighbor. Mexico also has called for retaining the mechanism.
Though the system for resolving tariff disputes is only one of many issues that U.S. officials are expected to put on the table in the talks, it is a particularly divisive one. For President Donald Trump, the panels’ power to overturn tariffs strikes at the heart of his “America First” trade policy. It also interferes with his campaign’s spirited defense of measures to protect U.S. industries against what he sees as unfair trade practices. (Source: The Wall Street Journal))
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