Jul 25, 2017

By Jane Brown

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It appears the Trudeau Liberals are prepared to walk away from NAFTA talks next month if members of the Trump Administration insist that dispute-settlement panels be removed from the accord.

Chapter 19 of the North American Free Trade Act allows Canada, the United States or Mexico to request the establishment of independent, bi-national panels when their exporters or producers feel they are the victims of unfair trade rulings by another NAFTA nation. These panels issue binding decisions to resolve the dispute.

Last week, it was announced by the U.S. government that eliminating the dispute resolution mechanism is among its top priorities in the talks.

US President Donald Trump and Canadian Prime Minister Justin Trudeau walk down the West Wing Colonnade between meetings at the White House in Washington, DC, February 13, 2017. / AFP / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)

A Globe and Mail report quotes a senior Canadian official unauthorized to speak on the record who says Prime Minister Justin Trudeau regards Chapter 19 as the “red line” that Canada will not cross. And the individual says, Mr Trudeau is set to walk away from negotiations if U.S. Trade Representative Robert Lighthizer declines to relent on the panels.

If this happens, Trudeau would be following the example of then Prime Minister Brian Mulroney, who ordered his negotiators to leave 1987 talks on a Canada-U.S. free trade deal until a dispute settlement mechanism was included.

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