Canadian officials say billionaire Wilbur Ross, the nominee for U.S. commerce secretary, has indicated to them that a formal-notification letter to open negotiations on NAFTA will be sent to Canada and Mexico within days of Friday's inauguration of President-elect Donald Trump, according to The Globe and Mail newspaper.
The United States reportedly wants to discuss country-of-origin rules, which govern how much content from outside NAFTA a product can contain and still qualify to be shipped duty-free.
Country-of-origin rules affect automakers in North America. Under NAFTA, the country-of-origin threshold for preferential treatment for assembled vehicles is 62.5 percent.
The Trump administration is expected to take a harder line on exactly what can cross the border duty-free, the newspaper said.
The United States also reportedly wants to discuss independent dispute tribunals, which the United States views as unaccountable and says give too much power to Canada and Mexico.
Ross is previously on record as having called NAFTA the “poster child for unbalanced trade and investment.”
However, Ross told Business News Network in October 2016 that “in the case of the trade between the U.S. and Canada, it is relatively much better-balanced than is the trade between the U.S. and Mexico” so “Canada doesn’t have a lot to fear” with Trump as president.
The Globe and Mail said Foreign Affairs Minister Chrystia Freeland has already contacted Ross about NAFTA.
When she was Minister of International Trade, Freeland helped seal the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) in late 2016. She was recently named Minister of Foreign Affairs during a cabinet shuffle, but remains active on the NAFTA file.
“The Minister looks forward to working very closely with the new U.S. administration, and with the United States Congress on issues of mutual interest, including trade and investment in various sectors,” Freeland’s press secretary Chantal Gagnon wrote in an email to Automotive News Canada on Tuesday.
“We are clearly a pro-trade government and our deep people-to-people ties and strong integrated economies provide the basis for advancing our strong and prosperous partnership with our southern neighbour.”
Gagnon said Canada has also discussed Trump’s proposed “border tax” with his transition team.
“We have a constructive working relationship with the Trump transition team, and discussions are ongoing. This particular proposal is something that has been floated for quite some time, and is opposed by at least as many American lawmakers as support it,” Gagnon wrote in the same email, “but at this stage, we are going to continue to work with the incoming administration on the interconnectedness and to the mutual benefits of our two economies.”