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NAFTA, CETA and Softwood

International trade update: NAFTA, softwood and CETA

North American free trade renegotiations

On August 16, 2017, NAFTA renegotiations began in Washington, DC, with Canada, the United States and Mexico participating in the trilateral talks. In advance of the negotiations, FCM provided a submission to the federal government based on FCM's Municipal Principles for Free and Fair International Trade.

We called for the federal government to ensure that the views and concerns of municipalities are represented at the negotiating table on trade matters that may affect local economies. The submission also highlights the need for reciprocity in government procurement practices and meaningful dispute resolution mechanisms. Canada was successful in previous softwood lumber disputes, thanks to a mechanism of this nature. FCM will continue to participate in ongoing consultation with Global Affairs Canada during the NAFTA renegotiations.

Softwood lumber dispute

The most recent softwood lumber dispute started in April 2017, when the U.S imposed countervailing duties of between three and 24 per cent on Canadian exports of softwood lumber, citing unfair subsidies. Then on June 26, 2017, the U.S announced a preliminary determination of dumping and imposed additional rates of 4.59-7.72 per cent. Along with the April duties, this brings the total average for Canadian producers to 27 per cent.

The U.S.-Canada dispute over softwood lumber has been going on over the past few decades, but resurged when the Softwood Lumber Agreement expired in 2015. Canada pledged to fight the lumber duties in court and can do so after the U.S. issues their final determinations related to dumping and countervailing duties in the fall of 2017. An agreement on softwood lumber could be reached before that time.

On June 1, 2017, the federal government announced an $867 million dollar aid package to support forest industry workers and communities during the ongoing dispute with the U.S. The government has also said they will keep trade negotiations with the United States on softwood lumber and NAFTA separate for the time being.

At the FCM Annual Conference on June 4, FCM's Quebec Caucus sponsored a resolution on "Free and Fair Trade - Softwood Lumber", and it was adopted. FCM will continue to ensure that the federal government hears municipal concerns related to the softwood lumber dispute.

Canada-EU Comprehensive Economic and Trade Agreement

Backgrounder: What you need to know about CETA

As you may know, CETA will come into effect as of September 21, 2017. This will have an impact on the ways that municipalities procure goods and services.

The updated International Trade Agreements and Local Government: A Guide for Canadian Municipalities is available through the Global Affairs Canada website. A new section was added with detailed information on the government procurement provisions under CETA and frequently asked questions. FCM will continue to work with Global Affairs Canada on tools for implementation.

Please review the updated guide to ensure that your municipal procurement practices align with CETA provisions. The guide will help you figure out whether a procurement or Public Private Partnership are covered under CETA.

Still, many communities will be exempt from these procurement obligations if they are purchasing goods or services that cost less than approximately $340,600 and for construction services of less than $8.5 million.

More information:

Should you have specific comments or questions related to the CETA, please contact Global Affairs Canada at CETA-AECG@international.gc.ca.

Global Affairs Canada also updates information on CETA and the impact for municipalities on its website. In addition, the government has developed fact sheets on key sectors under CETA that are available on its website, including sectors such as agriculture, forestry and infrastructure.

Page Updated: 07/09/2017