As the sixth round of the negotiations on North American Free Trade Agreement begin next week in Montreal, Canada, the controversy over exactly what a new agreement might involve—if there is one at all—continues to generate debate.
As the NAFTA renegotiations were about to start, the Canadian government publicly stated its core objectives for a renewed North American Free Trade Agreement.
These included making NAFTA more progressive by bringing strong labor safeguards and enhanced environmental provisions into the core of the agreement; adding a new chapter on gender rights (and another on Indigenous issues, in line with Canada's commitment to improving relationship with its Indigenous peoples), and reforming the controversial Investor-State Dispute Settlement (ISDS) process—a system through which investors can sue nations for alleged discriminatory practices—"to ensure that governments have an unassailable right to regulate in the public interest."
Following the third round of NAFTA negotiations, Laura Dawson of the Wilson Center's Canada Institute wrote in early October that "the negotiations had split into two separate tracks": one focused on easy consensus (based on the Trans-Pacific Partnership text, which has already been approved by the three parties), and the other "characterized by differences so irreconcilable that they threaten to derail the negotiations."
In a blog prior to the fifth round of negotiations in Mexico City, my colleague Sophia Murphy argued that "neither a TPP agenda through NAFTA 2.0 nor tearing up the treaty is the answer," and instead suggested a third track. Taking a page from Canada's stated commitment to trade and protect, and acknowledging the cost of any change, a third track would support trade that protects those "least able to absorb the shock bearing all the cost of adjustment, whether it is going to be a new NAFTA or no NAFTA."
An important part of the third track must include getting rid of one of the most controversial dispute settlement mechanisms in NAFTA called investor-state dispute settlement mechanism (a provision Canada and Mexico unfortunately still support). While this dispute settlement mechanism has emerged as a sticking point, it is far from certain how the negotiations will proceed.