Vote at Commons trade committee to set pace for new NAFTA review

A contentious motion Justin Trudeau characterized as a "near miss" will come to a vote at the Commons trade committee Tuesday, immediately after Deputy Prime Minister Chrystia Freeland makes her case for swift passage of the implementation bill for the revised North American trade agreement.

When the committee last met on Feb. 5, Conservative MP Colin Carrie moved that six House of Commons standing committees — agriculture and agri-food; industry, science and technology; natural resources; human resources, skills and development; foreign affairs and finance — be invited to study Bill C-4 and submit proposed amendments to the trade committee by April 2.

The motion surprised other committee members, who asked for time to consider it before voting at their next meeting. The outcome of Tuesday's vote could be critical to the Liberal government's hopes to pass the legislation quickly.

Both Mexico and the United States have finished ratifying the new NAFTA, putting all eyes on Canada now.

The day after Carrie's motion was introduced, the prime minister told a meeting of Canada's big city mayors that there had been a "near miss" at committee because of some Conservatives, and urged the mayors to lobby their MPs for quick passage of the agreement.

"There are certain messages that could be passed to some parties that might be playing some challenging games and around delaying NAFTA," Trudeau said.

Liberals no longer hold a majority on this committee, or any other. If MPs from the Bloc Québécois — which voted against an earlier motion required when this bill was introduced — and the NDP vote with the Conservatives, this committee motion could pass, setting up a slower and more complex review of the legislation.

As of Monday evening, New Democrat Daniel Blaikie was still considering how he will vote on the motion.

Before they vote Tuesday, MPs on the trade committee will hear an hour of testimony from Freeland, the government's lead minister on NAFTA's renegotiation, starting at 11:30 a.m. ET.

The deputy prime minister will be joined by Kirsten Hillman, Canada's acting ambassador in Washington, and Steve Verheul, Canada's chief negotiator.

The trade committee has scheduled a long list of stakeholder groups and trade experts to appear over the next three days.

Economic analysis not done yet

Verheul and other officials fielded questions from MPs for two hours at the committee's last meeting. 

Before the U.S. Congress ratified the agreement, its International Trade Commission completed an economic analysis of the deal for legislators' consideration. It found "moderate" benefits from the revised deal, based largely on a methodology that quantified "reduced policy uncertainty" about the deal's future. 

Verheul told MPs that in his view, the U.S. report has "fundamental flaws": uncertainty can't be measured quantitatively, and if that was removed from the American analysis, it projects an economic loss from the revised NAFTA, also known as the Canada-U.S.-Mexico Agreement on trade.

Conservatives want more disclosure of the analysis economists at Global Affairs Canada have been working on since the deal was finalized. Verheul told MPs he expected to see a draft of it following his testimony, but it has not been released in the nearly two weeks since.

Verheul said his department couldn't "go too far" until the final text became clear last December, when all three countries signed a protocol of amendment.

He said economists are trying to "come up with something that we can defend credibly" and suggested it will be more of a qualitative analysis on the enhanced regulatory co-operation and reduced barriers to trade this deal brings.

Verheul said because Canada already enjoys the economic benefits of free trade in North America, "significant new gains are not likely to appear."

MPs also asked what happens if the Opposition proposes amendments — similar to what Congressional Democrats did, in return for supporting ratification.

Verheul said amendments at this stage would require reopening negotiations to "see if we could reestablish a balance of concessions on the basis of a new proposal put forward by us."

Canada did not seek concessions from the U.S. in return for changes Democrats wanted last fall, Verheul said, because those changes "made the agreement better for us."

Trudeau confident of passage

Canada's premiers, as well as business groups, have called for timely ratification of the agreement. Even Canada's dairy sector, which stands to be on the losing end of this deal, had admitted that overall, the deal is in the national interest.

On top of recent compensation for trade deals with Europe and Pacific Rim countries, dairy producers and processors are negotiating even more financial assistance, in return for taking this one for the team, too.

Dairy's primary concern now is timing. Arguably the most harmful concessions in the agreement are its unprecedented global export caps on milk protein concentrates, skim milk powder and infant formula. The limits phase in gradually, based on the sector's fiscal year, which begins August 1.

Under questioning by the NDP's Blaikie, Verheul said if Canada ratified the agreement after May 1, some harm from the export caps could be pushed into the next fiscal year. The new NAFTA takes effect on "the first day of the third month after the last party ratifies the agreement."

Verheul reminded MPs that the Trump administration's statement of administrative action on the new NAFTA confirms it would proceed with Mexico alone if Canada does not ratify, putting future trade at risk.

"We have a strengthened agreement in relation to what we have now and we have security of access, that is something to be highly valued," he said, noting that over 70 per cent of Canada's exports go to the U.S. "I would hope that we would give that careful consideration going forward."

At the Munich Security Conference last Friday, Trudeau thanked a delegation from the U.S. Congress for its support during NAFTA's renegotiation and ratification. The prime minister told Republican Sen. Lindsey Graham he's "very confident we have the votes."

In Canada, Parliament does not ratify trade treaties. But the federal cabinet is unlikely to inform the U.S. and Mexico that it has ratified until laws and regulations are changed with this bill, bringing Canada into compliance.

"Our parliamentary system is a little ... I won't say a little more complex than you guys," Trudeau joked with Graham at the start of the meeting. "It works fine, we just normally start after you guys finish your processes."