August 11, 2017 / 7:13 PM / in 2 months

Ahead of NAFTA talks, Canada says dispute mechanism essential

FILE PHOTO - Canada's Foreign Affairs Minister Chrystia Freeland delivers a speech on Canada's foreign policy in the House of Commons on Parliament Hill in Ottawa, Ontario, Canada on June 6, 2017. REUTERS/Chris Wattie/File Photo

OTTAWA (Reuters) - An effective dispute settlement mechanism is essential in any trade agreement, Canada’s foreign affairs minister said on Friday, less than a week before the first round of negotiations on the North American trade pact.

Canada’s desire to include a dispute settlement mechanism in a renegotiated North American Free Trade Agreement (NAFTA) has put the country on course for a potential clash with Washington, which said in its goals released last month it wants to drop the current system, known as Chapter 19.

Under Chapter 19, binational panels hear complaints about illegal subsidies and dumping and then issue binding decisions. The United States has frequently lost such cases.

“Having an effective dispute settlement mechanism is really essential in any trade deal,” Foreign Affairs Minister Chrystia Freeland told reporters.

“Canada really understands the importance of independent, objective, transparent dispute settlement within NAFTA and it’s something that we’ll be talking about with our partners and explaining to them,” Freeland said.

Freeland’s comments echoed those recently made by Prime Minister Justin Trudeau, as well as Canada’s ambassador to Washington, David MacNaughton. The first round of NAFTA talks will start in Washington on Aug. 16.

Freeland said after meeting with members of the agricultural sector that the industry recommended the NAFTA talks could be used to reduce some of the red tape they face around cross-border trade.

That could be an area of productive conversations with the United States, given the U.S. administration’s focus on making it easier to do business, Freeland said.

Reporting by Leah Schnurr; editing by Diane Craft and Phil Berlowitz

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