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Five Key Objectives for Canada Ahead of NAFTA Renegotiation

Ottawa, June 1, 2017—Canada should come to the renegotiation of the North American Free Trade Agreement (NAFTA) with five key objectives to update and enhance trade and investment across the continent, according to a new Conference Board of Canada report.

“Canada faces a delicate balancing act between defending current market access provided in the existing NAFTA and updating the agreement to meet the requirements of a 21st century economy,” said Michael Burt, Director, Industrial Economic Trends, The Conference Board of Canada. “Even in areas where Canada may be seeking to maintain provisions, our negotiators should still come to the table with the objective of expanding, improving, and strengthening NAFTA.”


  • Canada should come to the table with the objective of expanding, improving, and strengthening NAFTA.
  • Freer trade in North America led to significant benefits for all three countries, including the U.S, with American exports to Canada and Mexico supporting nearly 3 million jobs.
  • Most of the gains in merchandise trade made possible by CUSFTA and NAFTA have already materialized. However, there are still major improvements that can be made to NAFTA, particularly in the areas of trade in services, government procurement, rules of origin, investor-state dispute settlement mechanisms, and labour and environmental standards.

Freer trade in North America led to significant benefits for Canada in the form of increased trade, output and productivity gains in the manufacturing sector, and a greater variety of products available to Canadians. NAFTA was also positive for the U.S., with American exports to Canada and Mexico supporting nearly 3 million jobs in the United States.

The importance of NAFTA for the Canadian economy and for the well-functioning of North American supply chains means that governments, business leaders, and stakeholders (such as labour unions and civil society interests) need to develop a strategy to protect Canadian interests while addressing the concerns of our NAFTA partners.

To support Canada in this effort, the Global Commerce Centre report, NAFTA 2.0 and Canada: Upgrading a 20th Century Deal for a 21st Century World, outlines five key objectives for Canada in renegotiating NAFTA:

  1. maintain a trilateral agreement with the U.S. and Mexico, and commit to comprehensive consultation with the Canadian public and stakeholders;
  2. facilitate the cross-border mobility of business people to support trade in services; 
  3. maintain and enhance access for traded goods, by pressing to maintain North American content rules in the auto sector, obtaining a permanent waiver from Buy America provisions, and negotiating stable and predictable access to the U.S. market for Canada’s softwood lumber exports, while being prepared to ease protections in supply-managed sectors;
  4. encourage innovation and digital trade through the creation of a chapter in the agreement dedicated to e-commerce, while maintaining cultural exceptions provisions from the existing NAFTA; and
  5. modernize the agreement to today’s business realities and standards, including revising the NAFTA rules of origin to help smaller businesses comply, reviewing investor-state dispute settlement mechanisms, updating labour and environmental standards, and eliminating the energy proportionality clause in NAFTA.

For each of these objectives, the report presents specific actions to ensure NAFTA 2.0 will benefit all Canadians.

The report is published by the Global Commerce Centre, a Conference Board of Canada's research centre that provides evidence-based tools to help companies and governments respond successfully to the trends reshaping the global business environment.

Join Conference Board staff for a webinar, NAFTA 2.0 and Canada, on June 13, 2017, at 2 p.m. EDT.

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