Trump doesn’t always follow rules, so Canada needs NAFTA’s Chapter 19: Trudeau

At Trump’s behest, the three NAFTA countries have been negotiating for more than a year

Prime Minister Justin Trudeau branded Donald Trump a rule breaker in arguing Wednesday for Canada’s fight to preserve the dispute settlement chapter that the U.S. president wants shredded from the North American Free Trade Agreement.

Trudeau offered some of his sharpest criticism of the unpredictable American president during a telephone interview with an Edmonton radio station, just as Foreign Affairs Minister Chrystia Freeland resumed NAFTA talks in Washington with U.S. trade czar Robert Lighthizer.

While Freeland said she agreed with Trudeau’s assessment of Trump, she went out of her way to praise Lighthizer’s “good faith” and “good will,” clearly assuming the role of the good cop as the NAFTA talks enter a critical phase just a block from Trump’s White House.

Trudeau, meanwhile, slid into the so-called bad cop role, telling Edmonton radio station CHED that Canada won’t give an inch to Trump’s desire to scrap NAFTA’s Chapter 19 dispute resolution panels. The chapter allows companies to have their differences settled by independent arbiters — something Trump views as an infringement of U.S. sovereignty.

“We need to keep the Chapter 19 dispute resolution because that ensures that the rules are actually followed. And we know we have a president who doesn’t always follow the rules as they’re laid out,” Trudeau said.

As she emerged in the sweltering Washington humidity after two hours of talks with Lighthizer, Freeland said she wanted to stick to her agreement with Lighthizer to not negotiate in public. But she added: “I agree with the prime minister in public all of the time, and in private 99.99 per cent of the time … he made some important comments.”

At Trump’s behest, the three NAFTA countries have been negotiating for more than a year to revamp the trilateral agreement that has been integral to the continent’s economy for more than two decades. The U.S. and Mexico reached a side deal last month, leaving Canada to negotiate separately with the U.S.

In the radio interview in Edmonton, Trudeau reiterated his full-throated defence of Canada’s cultural exemption in NAFTA.

READ MORE: Despite Trump deadline, NAFTA talks to resume next week

Sources familiar with the Canadian bargaining position say the cultural exemption Canada has insisted on preserving since NAFTA talks reopened remains an 11th-hour sticking point.

“The idea of preserving it remains an unresolved issue between the two,” said one source, who requested anonymity because of the sensitivities surrounding the issue.

Part of the disagreement on culture revolves around Canada’s decision to allow the broadcast of glitzy American Super Bowl commercials.

The decision by Canada’s broadcast regulator to allow the sometimes iconic American advertisements to appear on Canadian television has raised the ire of Lighthizer during the long renegotiation of NAFTA.

“The United States is very concerned about this policy,” Lighthizer wrote earlier this year in his annual report on barriers to U.S. trade.

On a section on Canadian content in broadcasting, Lighthizer highlighted the Canadian Radio-television and Telecommunications Commission’s decision in 2015 that banned the long-time practice of Canadian advertisers inserting their ads into the Super Bowl broadcast over the more popular American ones.

The new rules went into effect in time for the Super Bowl in February 2017.

The NFL and Bell Media, which holds the Canadian rights to the game, filed separately asked the Federal Court of Appeal to overturn the decision. In December 2017, the court dismissed the appeals.

Lighthizer’s report said American networks had concerns about the CRTC policy: “U.S. suppliers of programming believe that the price Canadian networks pay for Super Bowl rights is determined by the value of advertising they can sell in Canada, and that the CRTC’s decision reduces the value of their programming.”

Lighthizer also said American broadcasters operating in border states have also complained about Canadian counterparts picking up the U.S. signals and redistributing in Canada without consent. “The United States is exploring avenues to address these concerns,” Lighthizer wrote.

Canada and the U.S. need to present an agreed-upon text to the U.S. Congress by Oct. 1 in order to join the deal the Trump administration signed with Mexico. Trump is threatening to move ahead on a deal with Mexico that excludes Canada.

Trump needs a win on trade ahead of the U.S. midterm elections in November that will test the president’s ability to keep control of Congress.

But Trudeau suggested Wednesday that he’s in no rush to anybody any favours.

“We’re not going to accept that we should have to sign a bad deal just because the president wants that,” the prime minister said.

The overall goal of this week’s talks is to reach a deal by Dec. 1 so Congress can give its approval to a revised three-country NAFTA before Mexico’s new president takes office.

Freeland and Lighthizer continued their face-to-face talks Wednesday afternoon.

Mike Blanchfield, The Canadian Press

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