This obscure chapter in NAFTA could be Canada’s deal-breaker
On Oct. 1, 1987, days before the U.S. and Canada signed their biggest-ever trade deal, then-Prime Minister Brian Mulroney shocked the Americans by walking away from the negotiating table.
It was a high-stakes gamble designed to ensure the Free Trade Agreement contained a dispute-settlement mechanism — what Mulroney called his essential condition — that would give Canada a way to resolve trade conflicts outside U.S. courts. The David-and-Goliath move worked, and two days later the countries reached an agreement.
Fast forward 30 years, and Justin Trudeau, the current prime minister, is arriving at the same crossroads as his predecessor. The U.S. confirmed last week that among its top objectives in upcoming negotiations on the North American Free Trade Agreement — which superseded the FTA in 1994 — is the elimination of the Chapter 19 dispute-resolution mechanism that Mulroney went to such lengths to preserve.
Will it be the deal breaker it was in 1987?