232 tariff threat torments NAFTA negotiations

Readers take note – Darrel Pearson, head of Bennett Jones international trade and investment practice, is quoted in this article. You can still have the opportunity of meeting Darrel in person at the CSCB annual conference where he and Peter Kirby, a partner at Fasken, will be discussing the practice of international trade in Canada.

Despite the eye-popping figures thrown around in the NAFTA conversation — $2 billion in daily trade, 18 million autos built each year, hundreds of thousands of jobs in the U.S. — one number in particular seems to be giving fits to Canada’s negotiating team: 232.

That's the section of U.S. trade law that lets President Donald Trump use national security as justification to impose crippling tariffs on foreign imports, a sword of Damocles the federal Liberal government desperately wants to blunt.

Sources say Thursday's talks between Foreign Affairs Minister Chrystia Freeland and U.S. trade ambassador Robert Lighthizer were dominated by efforts to secure a commitment from the Americans that a new NAFTA deal would mitigate the risk of such tariffs...

But as some of the more fundamental differences fall away, Sec. 232 has indeed emerged as a major issue, trade watchers say.

"I think the Section 232 issue is very big. Chapter 19 dispute resolution is less important," said trade lawyer Darrel Pearson, head of the international trade and investment practice at Bennett Jones in Toronto.

That's because, as Canada's experience with softwood lumber would suggest, a means of resolving disputes doesn't make disputes go away — and Trump's demonstrated proclivity for shooting first and asking questions later would seem to amplify that issue even more...

This was excerpted from a 20 September 2018 article by The Canadian Press.