CANADA ECONOMICS

NAFTA

The Globe and Mail. 20 Jul 2017. Washington lays down aggressive timeline for NAFTA talks
ADRIAN MORROW, WASHINGTON
STEVEN CHASE, OTTAWA

The renegotiation of the North American free-trade agreement will start on Aug. 16, the earliest possible date, as the Trump administration pushes an aggressive timeline that aims to close a deal by early next year.
The first round of talks – which will reopen the pact between Canada, the United States and Mexico for the first time in its 23-year history – will take place in Washington and last four days, U.S. Trade Representative Robert Lighthizer announced Wednesday.
Mr. Lighthizer also unveiled the United States’s chief negotiator: John Melle, a career civil servant who has worked at USTR since 1988 and is described by those who know him as a steady hand with a direct, no-drama style.
The announcements came the same day Mexican trade officials, mostly from the Secretariat of the Economy, hunkered down with their Canadian counterparts in Ottawa, in what sources said was a “relationship-building” exercise ahead of the talks.
New details also emerged about the Trudeau government’s approach to the negotiations. For one, Canadian provinces will not be at the table, although the federal government said they will consult premiers regularly. » During the first two years of the recent Canada-European Union negotiations, provincial representatives were involved. But this was deemed unworkable and their involvement transitioned into more of a consultative role. In the NAFTA talks, provinces will be consulted but will not be at the table, similar to the later years of the Canada-EU negotiations.
And Ottawa has obliged business lobbyists and other stakeholders to sign non-disclosure agreements so they don’t reveal details of the country’s NAFTA strategy.
Mr. Lighthizer and U.S. Commerce Secretary Wilbur Ross have signalled that they want negotiations to unfold as quickly as possible. A Mexican official with knowledge of the process confirmed that the aim will be to conclude talks by late 2017 or early 2018.
Reuters on Wednesday reported the three sides had agreed to a seven-round negotiation with three-week breaks between the rounds. But Canadian and Mexican officials, speaking on condition of anonymity, said the number of rounds and the time between them are still fluid details.
Under the U.S. law empowering the President to negotiate trade deals, the administration is obliged to inform Congress 90 days before negotiations start. Mr. Lighthizer provided that notice May 18, making Aug. 16 the first possible date for talks.
The compressed schedule is designed to get a deal done before next year’s Mexican presidential election campaign heats up and the charged political atmosphere makes it harder to reach an agreement. But the tight timeline could be tough to meet, given the many contentious items on the Trump administration’s agenda.
The White House wants to cut the U.S. trade deficit, scrap dispute-resolution panels that have often ruled in Canada’s favour in trade spats with the United States and gain more access for American companies to Canadian government contracts, while reserving the right for U.S. state and local governments to shut out Canadian firms with “Buy American” provisions.
Thomas Bollyky, a former U.S. trade negotiator, said closing a deal in just a few months is virtually unheard of. “There has never been any agreement that fast from launch of negotiation to implementation,” he said. “Under any circumstances, it seems unlikely.”
It will also be hard to get Congress to ratify a new deal close to next fall’s midterm elections, he said, raising the prospect that the NAFTA process could stretch into 2019.
Former deputy USTR Robert Holleyman said one factor that could speed up negotiations is that some of what will be on the table – such as expanding free trade to cover the digital economy – was already negotiated between the three countries as part of the Trans-Pacific Partnership.
The choice of Mr. Melle as chief negotiator also bodes well for faster talks. “You’ve got the A-team working on that. John Melle is a great negotiator: He knows all the issues inside and out,” Mr. Holleyman said.
One person who has worked with Mr. Melle said he does not waste time with posturing during talks and does not employ the sort of abrasive tactics – such as blowing up or storming out of the room – that some negotiators use. Mr. Melle is a lifelong bureaucrat. He will be facing off against Steve Verheul, a veteran Canadian trade official who previously led talks on the Canada-European Union trade deal.
Mr. Verheul worked on the original NAFTA talks and the Uruguay round of multilateral negotiations that created the World Trade Organization.
On Wednesday, Mexican negotiators held talks with their Canadian counterparts in Ottawa. This tête-à-tête was a followup to the Tuesday meeting of all three countries in Washington to plan for NAFTA negotiations.
Canadian government officials played down any notion the Ottawa meetings were designed to form a common front before talks begin. They characterized the meeting as an informal gettogether to allow mid-level Mexican trade and economic experts to get acquainted with their counterparts in Canada.
The two countries are broadly aligned; both want to preserve as much of NAFTA as possible against any protectionist push from the United States.

The Globe and Mail. 20 Jul 2017. Liberals say Khadr campaign could affect NAFTA talks. Potential U.S. backlash over apology, compensation is on Trudeau, Tories say
LAURA STONE, OTTAWA

Senior Liberals are suggesting the federal Conservatives’ cross-border campaign against the Trudeau government’s $10.5-million payout to Omar Khadr could affect trade talks with the Trump administration.
Environment Minister Catherine McKenna and Prime Minister Justin Trudeau’s principal secretary, Gerald Butts, both used social media to connect the Conservatives’ condemnation of the Khadr payment with the renegotiation of the North American free-trade agreement, set to start on Aug. 16 in Washington.
The Conservatives, however, say any backlash in the United States resulting from the apology and settlement with Mr. Khadr, a former inmate at the U.S. detention facility in Guantanamo Bay, Cuba, is Mr. Trudeau’s responsibility.
“The fact that the Prime Minister elected to make this decision just as we were heading into NAFTA – that is his decision,” Conservative MP Michelle Rempel, who appeared on Fox News this week to lambaste the government, said in an interview. The bickering between parties has strained the recent bipartisan co-operation on the Canada-U.S. file. In response to a question on Wednesday about releasing Canada’s objectives in advance of the NAFTA negotiations, Mr. Trudeau told reporters, “I believe that the relationship with the United States needs to go beyond partisanship.”
“I have been pleased that, up until recently, anyway, we have been working very, very collaboratively and speaking with different voices but the same themes to the United States, to present a common front,” he said at a news conference in Quebec City. He added he would be “more than happy” to meet with the opposition parties to discuss the government’s approach to renegotiating NAFTA.
In a series of tweets on Tuesday evening and Wednesday morning, Liberals and Conservatives blamed each other for any potential conflicts on the trade file.
“US announces NAFTA goals & #CPC MPs in US talking … Khadr w #altfacts. Irresponsible. Millions of Cdn jobs at stake,” Ms. McKenna tweeted.
“Dangerous game #CPC is playing. Cda-US relationship should be above domestic politics. We should all be on the same team focused on trade,” she later wrote.
In a tweet, Conservative MP Candice Bergen told Ms. McKenna that the Liberal government “should have counted the full cost of your payment to Khadr. Not just in $$ but in potential damage to US/Canada [relations.]” Ms. McKenna responded that “NAFTA negotiations are about to start. Assume your party cares about Cdn economy & jobs. That is what you should be talking about in the U.S.”
Mr. Butts also remarked on the timing of the Conservatives’ criticism of the payment and apology to Mr. Khadr, a Canadian citizen who was sent to Guantanamo Bay at the age of 15 after he was accused of throwing a grenade that killed U.S. army medic Sergeant Christopher Speer and injured Sergeant Layne Morris in Afghanistan. The Supreme Court of Canada ruled in 2010 that the actions of Canadian officials who participated in U.S. interrogations of Mr. Khadr had offended “the most basic Canadian standards about the treatment of detained youth suspects.”
“Conservatives mount aggressive anti-PM Trudeau campaign in the US, on the eve of NAFTA renegotiation,” Mr. Butts tweeted on Wednesday. On Sunday, the Wall Street Journal published an opinion piece from Conservative MP Peter Kent, called A Terrorist’s Big Payday, Courtesy of Trudeau, and Ms. Rempel appeared Monday on Fox News, the same day the U.S. administration released its sweeping list of more than 100 negotiating objectives for NAFTA. The Conservative Party also launched a website, Khadr Questions, which invites visitors to tweet to Mr. Trudeau’s government with questions and concerns about the payment. The site collects personal data from visitors, although a Conservative spokesman said it is not a fundraising initiative.
Ms. Rempel, who is in Washington for meetings this week, called the suggestion that the Conservatives’ opposition is souring Canada-U.S. relations “absolutely ridiculous.”
“Of course the Americans are going to pay attention to this issue, because it affects the families of the soldiers who were injured and killed,” she said, adding, “A lot of Canadians don’t share the Prime Minister’s sentiment.” Ms. Rempel added it is an indisputable fact that no court ruling compelled the Trudeau government to pay Mr. Khadr $10.5-million. “I think it was very important to clarify that this wasn’t a payment that was dictated by a court.”
Mr. Khadr’s lawyers had filed a $20-million lawsuit against the federal government. Mr. Trudeau recently said he understands why Canadians are angry about the payout, but insisted a court case would have ended up costing taxpayers tens of millions of dollars more. The Liberal government has faced a public backlash against the apology and payment, with a public-opinion survey showing 71 per cent of Canadians opposed the deal.
Mr. Khadr, now 30, spent more than 10 years in U.S. and Canadian custody, much of that time in Guantanamo. Once the youngest detainee there, he was transferred to Canada in 2012 after accepting a plea deal. He later recanted.
Ms. McKenna’s office declined an interview request, but she recently sent a letter to her constituents in Ottawa Centre about her government’s decision. She said legal actions relating to Mr. Khadr’s case already cost the government $5-million.
“Our Government is committed to upholding the Canadian Charter of Rights and Freedoms. We benefit from having a Charter and it is of high importance that we ensure that the rights within it are upheld for all Canadians,” she wrote.
She added the settlement agreement has no direct effect on Mr. Khadr’s bail conditions or his convictions under the U.S. Military Commission Act.

The Globe and Mail. 20 Jul 2017. The federal Liberals are likely to weather the storm surrounding Omar Khadr’s settlement. Khadr is to Trudeau what the census was to Harper
JOHN IBBITSON

The Omar Khadr affair is for the Trudeau government what the census scandal was for the Harper government: a midsummer meltdown that permanently taints the reputation of the prime minister.
There are important differences between the two imbroglios and we should remember that Stephen Harper’s Conservatives won the next election despite the census mess. But, as with that mess, the Kadhr affair will leave its mark.
Summer is a dangerous time for governments. Parliament is in recess, the prime minister and senior staff are stealing a bit of vacation. People are relaxing and recharging and getting ready for fall.
And so the government’s guard was down when news broke in the summer of 2010 that the Conservatives had terminated the mandatory long-form census. The story dominated the news for weeks. Municipal and provincial governments, academics, pundits – everyone with an interest in knowing the state of the Canadian population protested that gutting the census was an act of political vandalism.
Caught by surprise, and with Mr. Harper deliberately ignoring the news while he vacationed at the government’s Harrington Lake retreat, senior advisers struggled to shape a response. People had complained about the intrusive nature of the questions on the long form, industry minister Tony Clement responded. Except virtually no one had complained.
The chief statistician, Munir Sheikh, had assured the government that a voluntary long form would be just as accurate as a mandatory version, Mr. Clement said next. The chief statistician was so incensed by that canard, he quit.
Wounded, angry, refusing to admit it was in the wrong, the government hunkered down. Eventually, the agenda moved on. But people remembered.
Fast foward to this summer. When news broke that the federal government had settled Omar Khadr’s lawsuit for $10.5-million and an apology, critics angrily alleged the government had turned a confessed terrorist into a millionaire. Caught off guard, the Liberals kept changing their story. Previous governments had violated Mr. Khadr’s Charter rights and this government was simply doing right by him, Justin Trudeau maintained. When that didn’t fly, the Prime Minister insisted the government was saving the taxpayers money by settling for a smaller amount now, instead of a larger amount later. People aren’t buying that one, either. Seven in 10 oppose the settlement, according to an Angus Reid poll.
When the census story broke in 2010, the Liberals painted Mr. Harper as a philistine prepared to destroy knowledge for the sake of a blinkered ideology. Similarly, the Conservatives are using the Khadr settlement to paint Mr. Trudeau as not only soft on terrorists, but willing to pander to one. The census charge stuck to Mr. Harper, and the Khadr charge will likely stick to Mr. Trudeau.
There is, however, one crucial difference between the census scandal and the Khadr affair. In the former case, Stephen Harper was entirely in the wrong. Although he refused to admit it, he cancelled the census to starve the government of data that could be used to justify programs that Conservatives oppose. It truly was an act of political vandalism. But Mr. Trudeau can make a much better case for his actions.
You don’t have to believe, as some do, that Omar Khadr was an innocent child who suffered terribly in Guantanamo for a crime he never committed and whose confession was forced from him in a travesty of justice. You can instead believe that Mr. Khadr is a piece of work. It doesn’t matter. The Supreme Court ruled that his Charter rights were violated. He was going to win the lawsuit. The Liberals were simply bowing to the inevitable.
The Conservatives believe that doesn’t matter, that the government should have battled to the end and paid what the court ordered grudgingly and without an apology. Reasonable people can disagree on this point. There was no reasonable case for cancelling the census.
Still, the Liberals are going to wear this. There is nothing for Mr. Trudeau to do now but what Mr. Harper did in 2010: hunker down and wait for the agenda to move on.
If Stephen Harper could survive the census, surely Justin Trudeau can survive the Khadr affair.

The Globe and Mail. 20 Jul 2017. Tariffs on Mexican auto exports would hit consumers: study
GREG KEENAN

Tariffs imposed on vehicles and parts exported from Mexico would increase costs to auto makers that would range from $650 (U.S.) to $1,145 and those costs would be passed on to consumers, says a new study on the impact of tariffs and border adjustment taxes on the auto sector.
The study, done by Boston Consulting Group for the Motor & Equipment Manufacturers Association (MEMA), a trade organization for U.S. auto-parts makers, examined the impact tariffs of 20 per cent and 35 per cent would have on the auto industry if the United States departs the North American freetrade agreement.
The report was issued one day after Jerry Dias, president of the Canadian union Unifor, called on U.S. and Canadian officials to slap “heavy tariffs” on vehicles exported to the United States and Canada from Mexico as a means of diverting the flow of investment from Mexico to the more northerly members of NAFTA.
“At some point this will hit the consumer, there’s no way that [auto makers] or suppliers can eat this,” Xavier Mosquet, a senior Boston Consulting Group partner and lead author of the study, said Wednesday.
Tariffs are also unlikely to lead to a shift in assembly plant investment out of Mexico,
Mr. Mosquet said, because the U.S. vehicle market – destination for the vast majority of vehicles assembled in Mexico and in Canada – has hit a plateau.
Auto makers have been operating their factories at more than 100 per cent of capacity, he noted, and will scale that back as the market declines from its plateau during the next few years.
“We have enough capacity for the next 10 years,” he told a news conference and webcast in Detroit.
The report outlines a potential ripple effect from higher costs: Consumers would react by buying less expensive vehicles and keep their own payments down by passing on some new technologies designed to make driving safer.
“Some of the features to come out will be active safety features,” Mr. Mosquet said. Industry officials at the news conference pointed to active emergency braking as one new safety feature that the industry has agreed to include on vehicles, but so far is not required to be on cars.
Much of the study examined the impact of border adjustment taxes (BAT), which are on the agenda for Republican politicians in the U.S. House and Senate, although President Donald Trump appears to have stepped back from insisting on such taxes in his efforts to repatriate jobs to the United States in the auto sector and manufacturing generally.
Border adjustment taxes “will stunt job growth and hinder the ability of American manufacturers to compete in the global market,” said Steve Handschuh, president of MEMA.
U.S. auto-parts makers employ more people than any other sector within manufacturing, Mr. Handschuh said.
The report assessed the impact of border adjustment taxes of 15 per cent and 20 per cent. A 15-per-cent tax would add $1,025 on average to the cost of a vehicle, while a 20-percent levy would raise vehicle production costs by $1,800, the study said.
But they would not have the desired impact of causing auto-parts makers to shift production back to the United States from Mexico, Mr. Mosquet said.
“The value of the cheaper labour in Mexico is far higher than the cost of the BAT,” he said.
“You need a huge BAT to really make it compelling to reshore manufacturing.”
A border adjustment tax in the range of 40 per cent to 50 per cent would be required, he said.

The Globe and Mail. 20 Jul 2017. Five takeaways for Canada from the U.S. NAFTA mandate
LAURA DAWSON, Director of the Canada Institute at the Wilson Center in Washington

On Monday, the U.S. Trade Representative (USTR) released a North American freetrade agreement negotiating mandate for consideration by Congress. What it reveals gives Canadians a pretty good idea of what to expect from the coming negotiations. 1. It’s an aspirational document The negotiating mandate that each country takes to the table is a statement of hopes and dreams. It is soon tempered by the realities of other negotiating parties who come to the table with similar wish lists. The requirement to publish a negotiating mandate is a new obligation imposed on the USTR by Congress. Canada and Mexico are not similarly bound. Normally, the formulation of a state’s negotiating mandate is worked out in closed-door sessions between legislators, negotiators and business stakeholders. The U.S. notification provides a peek behind the curtain of how trade deals get done, but the contents should not be considered a fait accompli. The language offers a lot of wiggle room. This flexibility makes it easier for negotiators to claim a win under a range of different outcomes. 2. There are many reasons for Canada to like it
The most important thing the mandate reveals is that the United States is prepared to treat proceedings like a trade negotiation. The big fear emerging from the presidential campaign was that anti-trade forces in the Trump administration would abandon traditional trade rules.
Over the past several months, U.S. trading partners have been warned about a border tax applied to goods and energy products, national-security restrictions on steel and undefined mechanisms to reverse the U.S. trade deficit. While some of the language of protectionism and America First is in the mandate’s general principles, the sectoral elements reflect a predictable set of requests, couched in fairly orthodox trade language.
As a medium-sized economy, Canada consistently punches above its weight because of its mastery of global trade rules. But Canadians’ ability to create advantages or win-win outcomes depends on there being a game they can recognize.
Since 2010, Canadian negotiators have concluded six national and multistate free-trade agreements. They are in top form and well equipped to bring the new NAFTA to a successful conclusion.
The sectors and practices covered in the mandate will look familiar to Canadian negotiators. Many of the proposals, such as for digital economy and labour, resemble provisions of the TransPacific Partnership (TPP) that have already been agreed to by Canada, the United States and Mexico, so these elements should be pretty easy to add to a new NAFTA text. And a number of the TPP provisions have the added advantage of truly modernizing NAFTA.
These include new supports for digital trade, stepped up environmental and labour provisions, and fast-track border measures that would allow for greater use of new technologies and data sharing. 3. But there is at least one big stumbling block
The U.S. mandate paints a big red target on the Chapter 19 disputesettlement system that is used to resolve dumping and subsidies disputes. This measure has long been a source of bilateral acrimony and nearly caused the Canada-U.S. free-trade agreement negotiations to fail in 1987. Over all, the number of dumping and subsidy disputes between the two countries has fallen sharply since the 1980s as the two economies became more integrated, but one big, continuing dispute – softwood lumber – means that Canada will fight to hold onto Chapter 19. 4. Some targets are real, some are force of habit
Every year, the United States publishes a list of irritants that hurt the ability of U.S. exporters to access foreign markets. The Canada list always includes supplymanaged dairy and investment restrictions in financial services and telecommunications. Since the U.S. mandate does not prioritize which issues are deal breakers and which are merely routine complaints, it is impossible to tell at this point which of Canada’s protected sectors are truly under threat. A better way to figure that out is to watch the USTR’s stakeholder hearings and key Congressional meetings (conveniently webcast online) and look for persistent themes, repeated by individuals capable of mobilizing dollars and influence. 5. This will be a long negotiation The scope and complexity suggested by the 17-page mandate indicates we’re in for a long negotiation, not a short tweaking exercise. Some of the TPP additions could be handled swiftly but most of the other negotiating subjects touch on protected sectors or practices that countries will be unwilling to give up without a fight. With the Mexican presidential election coming up in July, 2018, and U.S. Congressional midterms the following November, a deal that emerges nearly any time in 2018 risks being torpedoed by electoral politics. The three countries might be better off taking the time they need to really modernize this complex and important agreement and present a new text in 2019.

The Globe and Mail. Jul. 20, 2017. NAFTA talks ‘too important’ for partisanship, Trudeau says
LAURA STONE

OTTAWA — Prime Minister Justin Trudeau says the renegotiation of the North American free-trade agreement is “too important” for partisanship, after federal Conservatives went on a cross-border campaign to criticize the Liberal government for paying $10.5 million to former Guantanamo detainee Omar Khadr.

Senior Liberals this week suggested that the Tories’ campaign against the government’s payout to Mr. Khadr could affect upcoming trade talks with the Trump administration, set to begin on Aug. 16 in Washington.

“This is too important to fall into partisanship,” Mr. Trudeau told reporters on Thursday during a press conference in Barrie, Ont.

“I will continue to engage constructively and responsibly with all parties in the House on the path forward, because Canadians expect their representatives, whatever party they be part of, to be standing up for Canadian interests and making sure that we are creating the right deal for Canada as we move forward on modernizing NAFTA.”

The Conservatives, however, say any backlash in the United States resulting from the apology and settlement with Mr. Khadr, a former inmate at the U.S. detention facility in Guantanamo Bay, Cuba, is Mr. Trudeau’s responsibility.

Mr. Khadr, a Canadian citizen who was sent to Guantanamo Bay at the age of 15 after he was accused of throwing a grenade that killed U.S. army medic Sergeant Christopher Speer and injured Sergeant Layne Morris in Afghanistan. The Supreme Court of Canada ruled in 2010 that the actions of Canadian officials who participated in U.S. interrogations of Mr. Khadr had offended “the most basic Canadian standards about the treatment of detained youth suspects.”

Before the settlement, Mr. Khadr’s lawyers had filed a $20-million lawsuit against the federal government.

Mr. Trudeau again defended his government’s decision on Thursday, saying it would have cost much more to settle the case in court.

“Obviously people are troubled by the settlement, and as was I. And that’s why we settled. If we continued to fight this in court, we would have been spending three or four times as much money on a payout,” he said.

“Previous governments systematically and deliberately neglected to defend, and were even complicit, in the violation of a Canadian citizens rights. This is not about the facts of what Mr. Khadr did or didn’t do. This is about what the Canadian government did or didn’t do. And when a Canadian’s rights are violated, everyone pays.”

On Sunday, the Wall Street Journal published an opinion piece from Conservative MP Peter Kent, called “A Terrorist’s Big Payday, Courtesy of Trudeau,” and Conservative MP Michelle Rempel appeared Monday on Fox News, the same day the U.S. administration released its sweeping list of more than 100 negotiating objectives for NAFTA. The Conservative Party also launched a website, “Khadr Questions,” which invites visitors to tweet to Mr. Trudeau’s government with questions and concerns about the payment. The site collects personal data from visitors, although a Conservative spokesman said it is not a fundraising initiative.

Mr. Khadr, now 30, spent more than 10 years in U.S. and Canadian custody, much of that time in Guantanamo. Once the youngest detainee there, he was transferred to Canada in 2012 after accepting a plea deal. He later recanted.

REUTERS. JULY 20, 2017. Canada, Mexico urge quick NAFTA talks to end uncertainty
By Lesley Wroughton and David Ljunggren

WASHINGTON/OTTAWA (Reuters) - Top Canadian and Mexican diplomats expressed optimism on Thursday that a NAFTA deal could be reached early next year and cautioned that widespread uncertainty over the future of the three-way trade agreement had slowed business investment.

Mexican sources say the plan is to hold seven rounds of talks at three-week intervals, a schedule that trade experts warned was aggressive and not easily attainable.

Mexico's ambassador to the United States, Geronimo Gutierrez, said his country wanted to get the negotiations over before a presidential election campaign ramps up next year.

Gutierrez said no country would want trade discussions during a campaign.

"That is not wise ... because it becomes a Christmas tree, everybody wants to hang something onto the Christmas tree," he told an audience at the Washington International Trade Association conference.

U.S. officials say there is growing concern within the administration, business community, and among U.S. lawmakers that the policies of President Donald Trump could embolden anti-U.S. populist Lopez Obrador.

The Trump administration released its objectives for the talks on Monday. The first round will start on Aug. 16.

Gutierrez said there was still a possibility that Trump could back out of the talks.

"In all honesty, I can't say that risk has been completely dismissed," he said, adding: "No one would sit down and negotiate under a strong threat that at any time he would pull out."

Gutierrez said all three governments agreed that uncertainty over the future of the North American Free Trade Agreement had to be dealt with quickly.

"Investment decisions throughout North America have been, to the best of my knowledge, postponed because of uncertainty," he said.

David MacNaughton, Canada's ambassador to Washington, said while it would be a challenge to finish negotiations over just four months, it was possible.

"I do genuinely think all three parties want to find a solution to this because (of) the uncertainty that has been created ... people defer making decisions," said.

Canadian and Mexican officials met in Ottawa on Wednesday but spent little time on the substance of the talks, given uncertainty over how much could be achieved by the end of 2017, said a well-placed source.

"There's a 99 percent chance the negotiations won't be finished by then," said the source.

The three nations will also require all those involved, including stakeholders and lobbyists, to sign non-disclosure agreements.

A Canadian official said the move was designed to allow officials "to have frank conversations knowing it won't be in the public domain two hours later".

Reporting by Lesley Wroughton in Washington and David Ljunggren in Ottawa; Editing by James Dalgleish

INTERNATIONAL TRADE

EDC. JULY 20, 2017. WEEKLY COMMENTARY. A Comeback for Global Trade?
By Peter G Hall, Vice-President and Chief Economist

It has been a dreary decade for international trade. From the heights in 2008, global trade flows plunged, staged a quick partial revival, then went into a holding pattern from then until now. In terms of trade intensity, we are far from what we used to be, and many are resigned to our current state as a permanent new normal. The debate on the future of trade has reached a fever pitch, and resulted in a lot of public acrimony. In the context of trade’s track record and the public backlash against its supporting architecture, is a comeback even possible?

Broadly-based disappointment in trade performance is understandable. After all, hopes were so high that in a world of static and even declining populations, the spread of trade would include masses of new consumers and increase productivity through globalization of supply chains. In fact, hopes were so fixed on trade as a solution to other fundamental weaknesses in the economy that they remained steadfast for years following the recession. It is only very recently that globalization has fallen afoul of the average voter – in effect, patience has run out.

Are the detractors right? Did we wrongfully place so much faith in trade and what it could accomplish? Were we wrong to think that the success experienced in the last cycle was an unlocking of centuries of hidden economic activity that was going to take a lot of time to fully realize? Maybe past progress was just an illusion, or maybe it was real, but stamped with a “best before” date that was a whole lot sooner than we thought. These doubts hold a lot of appeal among the disenfranchised in the current cycle.

For evidence, detractors point to the structural impediments that they believe globalization gave rise to. How about financial sector woes, exacerbated by the global reach of large institutions and the damaging domino effects they could perpetrate in the event of one or two key institutions collapsing? Or the excesses in capacity that were created in the last cycle, many of which are still being paid for? Add to that the public bailout of the economy, which increased government debt levels across the world to levels previously considered untenable.

These and other structural developments have eroded confidence in the construct of our system. But are we giving up on this architecture just as the ‘system’ appears to be healing itself? Our view has long been that the business cycle is poised to come to the rescue just as these arguments are intensifying. If so, there should be evidence out there that things are happening in the economy – positive things – that we have not seen since the Great Recession.

Thankfully there is a growing list of ‘new’ events that fill the bill. First, labour force inclusion. Throughout the post-recession period, whole chunks of the labour force in both the US and Europe have been bypassed due to insufficient growth. The latest data show that at long last, participation of these groups is rising again. Second, Western World confidence is back in ways thought unlikely just a year or two ago. Third, business investment seems finally to be responding to tightening industrial capacity conditions in what could prove to be a grand revival of building activity. A fourth and likely most significant development is that monetary tightening is now occurring on a much broader base, following the lead of the Fed in unwinding one of history’s greatest periods of ultra-loose policy – one of the clearest signs that economic conditions are finally hitting their stride.

If this is the case, then a fifth indication will not be far behind. If the economy is getting back on its feet for the first time in seven or more years, then with no radical change in economic architecture, we can safely assume that global trade intensity will start to recover some of the ground lost during the Great Recession. Capacity constraints and cost considerations will inevitably turn businesses in tighter growth zones to look for solutions outside of national borders in ways that brought great past benefit. In a good many emerging market locations, there is lots of idle capacity and a willingness to re‑engage.

The bottom line? It has taken a long time – far longer than usual – to achieve the preconditions for a normalization of growth. The extraordinary delay has made us all much more skittish about the sustainability of growth. Current momentum suggests that global trade will be the next beneficiary. Best to get ready for it!

ENERGY

StatCan. 2017-07-20. Pipeline transportation of oil and other liquid petroleum products, May 2017

Closing inventories of crude oil and equivalent products
11,337,154.0
May 2017
Source(s): CANSIM table 133-0006.

Crude oil receipts

Pipelines received 19.6 million cubic metres of crude oil and equivalent products from Canadian fields and plants in May, up 29.6% from May 2016. Of this volume, 97% came from Alberta and Saskatchewan.

Wildfires in Fort McMurray that started in May 2016 contributed to lower crude oil pipeline activities last year. This explains most of the increase in pipeline activities in May 2017.

Chart 1   Chart 1: Pipeline receipts of crude oil from fields and plants
Pipeline receipts of crude oil from fields and plants



Crude oil deliveries

Pipelines delivered 6.3 million cubic metres of crude oil to Canadian refineries in May, up 16.2% compared with the same month in 2016. Of this total, 61% was sent to refineries in Western Canada, while the remainder (39%) was delivered to Ontario and Quebec refineries.

Exports and imports

Pipelines exported 14.7 million cubic metres of crude oil to the United States in May. Exports were 15.7% higher than the previous year. Imports rose 22.3% to 2.7 million cubic metres in May.

Chart 2   Chart 2: Exports and imports of crude oil by pipeline
Exports and imports of crude oil by pipeline



Closing inventories

Closing inventories of crude oil totalled 11.3 million cubic metres in May, up 2.0% compared with the same month in 2016.

Chart 3   Chart 3: Pipeline closing inventories of crude oil and equivalent products
Pipeline closing inventories of crude oil and equivalent products



FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/170720/dq170720c-eng.pdf

REUTERS. JULY 19, 2017. Brazil's Light authorizes Renova to enter exclusive talks with Brookfield

SAO PAULO (Reuters) - The board of Brazilian utility Light SA (LIGT3.SA) has given its approval for Canada's Brookfield Asset Management Inc (BAMa.TO) to enter exclusive negotiations to acquire its stake in renewable company Renova Energia SA (RNEW11.SA), the company said in a securities filing.

Light said that Brookfield's renewable energy unit in Brazil would have the right to negotiate exclusively for 60 days the acquisition of Light's stake in Renova and a cash injection into the company.

Reuters first reported Brookfield's bid to buyout Renova in July 7.

Reporting by Tatiana Bautzer; Editing by Daniel Flynn and Cynthia Osterman

RETAIL

StatCan. 2017-07-20. Annual retail trade, 2015

E-commerce and method of sale

E-commerce retail sales grew eight times as fast as retail sales from 2014 to 2015. E-commerce sales increased 13.3%, from $10.2 billion in 2014 to $11.5 billion in 2015. In comparison, total retail sales rose 1.6%, from $566.6 billion in 2014 to $575.5 billion in 2015. In 2015, e-commerce sales represented 2.0% of the retail sector's total sales.

The gains in e-commerce were widespread among store retailers, with most subsectors experiencing faster growth with their e-commerce sales than with their in-store sales from 2014 to 2015. Among store-based retailers, their e-commerce sales rose by 8.7% and their in-store sales increased by 2.1% during the period. In comparison, their sales from catalogue, mail-order or telephone increased by 0.8% and sales from all other methods (such as trade shows or special events) declined by 5.9% from 2014 to 2015.

FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/170720/dq170720e-eng.pdf

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