Freeland vows Canada will stand up to U.S. on autos, dairy in NAFTA talks

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Foreign Affairs Minister Chrystia Freeland has vowed in Parliament that Canada will defend its automotive, resource and dairy sectors from any U.S. assault at the NAFTA bargaining table that could cause job losses for Canadian workers.

The Liberal government was put on the defensive on Monday for the first time since negotiations on the North American free-trade agreement began as opposition MPs voiced concerns that Ottawa is not standing up to U.S. President Donald Trump's administration.

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"We are fighting very hard at the NAFTA negotiating table for the interests of all Canadian workers. That very much includes workers in the auto sector," Ms. Freeland told the House of Commons. "It very much includes workers in the natural resources sector and we are fighting hard for an energy chapter. The interests of Canadian workers are absolutely at the heart of our negotiating strategy and we are going to defend them."

The Conservative Party, which had largely refrained from criticism of the government's handling of NAFTA talks during the party leadership race, changed tactics on Monday with MPs accusing the Liberals of failing to stand up for auto and forestry workers and Canadian dairy farmers.

"I have yet to hear the Prime Minister stand up for our auto industry. I have yet to hear our Prime Minister stand up for our softwood lumber industry," Conservative foreign affairs critic Erin O'Toole told the House. "It is time for the Prime Minister to pull up his fancy socks and start fighting for Canadian interests."

The NDP also jumped in the fray, accusing the government of failing to defend Canadian auto jobs and stop any U.S. move to dismantle Canada's supply management system for dairy farmers.

"When it comes to our dairy farmers, we will defend their interests vigorously at the NAFTA negotiating table," Ms. Freeland said. "We will fiercely defend the national interest and promote our values."

Outside the House, Ms. Freeland also said Canada had tabled labour standards at the negotiations along the lines of the Canada-European Union free-trade deal to ensure that Mexico can't take advantage of its lower wages to steal jobs away from Canada and the United States.

"Canadian workers have legitimate anxiety about the way international trade can lead to a race to the bottom in labour standard and can erode their own living standards and wages," she said. "Those concerns, our government takes seriously."

The Foreign Affairs Minister appeared to express frustration with the Trump administration on Monday for not presenting substantive proposals on key issues that it has proclaimed as necessary to modernize NAFTA.

"We haven't yet received proposals from the United States on these more contentious issues," she told a news conference. "Canada is ready. Our positions are very clear and we look forward to having really constructive conversations with our American and Mexican partners once actual proposals that we can respond to are on the table."

The Trump trade team, led by U.S. Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross, has listed higher U.S. automotive content, Buy America on infrastructure such as pipelines and an end to trilateral trade-dispute mechanisms as top objectives in the talks aimed at reducing its trade deficit, largely with Mexico.

Ms. Freeland will host her U.S. and Mexican counterparts for dinner at Ottawa's National Arts Centre on Tuesday evening. It's the same place where former prime minister Pierre Trudeau hosted U.S. president Ronald Reagan in March, 1981. The NAFTA ministers' formal meeting will take place on Wednesday.

High-level Canadian advisers to Ms. Freeland have told The Globe and Mail that the trade talks have been stymied because no one knows what Mr. Trump wants or whether he would even sign a new NAFTA deal and risk alienating his base.

The chief U.S. negotiator, John Melle, rejected the notion that NAFTA talks were stalled and insisted they are progressing at a good pace.

"We've been working very hard so I don't see a problem," he told reporters on Monday. "We're moving across the board, so it's very ambitious."

Ms. Freeland, who is in charge of NAFTA talks, agreed that the negotiations taking place in Ottawa since Saturday made solid progress on "bread and butter" issues that matter to Canadian businesses, such as electronic forms at the border, automatic declaration of origin and regulatory harmonization.

But she also acknowledged the inability of the United States to table its key demands makes it difficult to meet Washington's goal of concluding a deal by the end of the year. The United States wants a deal before next year's U.S. midterm congressional elections while Mexico wants the talks over before its presidential election in 2018.

"We understand that our partners face some political constraints, which have encouraged them to seek a conclusion as quickly as possible," Ms. Freeland said. "We also understand that political uncertainty isn't good for the economy of any of the NAFTA countries. So we are much interested in concluding this as quickly as is humanly possible."

When it comes to rules of origin, the United States wants to set a floor for how much of a particular product must be made in North America – or even in the United States – to qualify for duty-free movement within the NAFTA zone of countries. Canada and Mexico would very likely oppose any move to set a bar for domestic content from any one NAFTA country.

The Americans are also seeking to scrap Chapter 19 of the deal, which allows one country to appeal another country's punitive duties to a binational trade panel. Canada is vowing to walk away from the negotiating table rather than give it up.

The United States has not publicly declared an interest in dismantling Canada's heavily protected dairy market, but a list of NAFTA objectives has said the White House favours "reducing or eliminating remaining tariffs" that keep U.S. agricultural goods from reaching Canadian or Mexican shelves.