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The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

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Congress Holds the Trump Cards in NAFTA Talks

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“Canadian negotiators should take note that they will not be able to ignore Capitol Hill.”

July 13, 2017 – A newly empowered US Congress will be holding the reins in the upcoming NAFTA talks, states a new report from the C.D. Howe Institute. In “Table Stakes: Congress Will be Sitting across from Canada at the NAFTA 2.0 Negotiations,” author Christopher Sands finds that since Congress has redefined the US negotiating process under 2015 legislation, it will be front and center in setting the pace and substance of the negotiations.

“I expect the forthcoming US negotiating list to reflect Congressional concerns and interests” notes Sands. “Canadian negotiators should take note that they will not be able to ignore Capitol Hill.”

“Due to the expanded role of Congress, this round of negotiations will be unlike those that have occurred before,” states Sands.

During previous talks, Canadian negotiators were able to focus mainly on the US Trade Representative (USTR), paying less attention to Congress due to the fact it was not involved in the process until after a deal had been agreed up between both sides.

“Now, as US interests press Congress to weigh in on their behalf during NAFTA 2.0 talks, they will have the means, motive and opportunity to do so,” says Sands. “Members and Senators will voice concerns and threaten Canadian interests, and Canadian negotiators will have to pay attention.”

The renegotiated agreement will require changes to US legislation to be implemented, and statutory deadlines added up mean that it is unlikely that the Congress will take up this legislation before the November 6, 2018 US midterm elections. Further, assuming that this election makes concluding an agreement on NAFTA 2.0 impossible, it may be that the next Canadian federal election will determine the fate of the agreement as the United States turns, shortly after the 2018 midterms, to focus on the 2020 US presidential and congressional elections.

“Congress may well discover these recent changes make any trade deal with the United States impossible,” concludes Sands. The US side of the negotiating table will include the USTR team and as many as 535 congressional sidekicks. “As with repealing and replacing the Obamacare legislation, the fact that changes are being made to rules that people are relying on today might make it hard to come to an agreement on changing NAFTA, however much it might need improvement.”

Click here for the full report.

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

For more information contact: Christopher Sands, Senior Research Professor and Director of the Center for Canadian Studies at the Johns Hopkins University School of Advanced International Studies; or Daniel Schwanen, Vice President, Research, at the C.D. Howe Institute; or email: amcbrien@cdhowe.org.   

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