Canada aims to keep NAFTA dispute-settlement mechanism: minister

[August 14, 2017]  OTTAWA (Reuters) - The Canadian government's goals for talks on modernizing NAFTA include preserving the pact's dispute-settlement mechanism, Foreign Minister Chrystia Freeland said on Monday, setting up a potential clash with the United States.

Freeland appeared to suggest Canada could walk away from the negotiations unless the so-called Chapter 19 dispute-settlement mechanism is kept in the updated North American Free Trade Agreement. Talks between Canada, Mexico and the United States start on Wednesday.

Washington wants to drop Chapter 19, under which binational panels review complaints about illegal subsidies and dumping, then issue binding decisions. The United States has frequently lost such cases.

"Canada will uphold and preserve the elements in NAFTA that Canadians deem key to our national interest – including a process to ensure anti-dumping and countervailing duties are only applied fairly when truly warranted," Freeland said in a speech at the University of Ottawa.

Noting that Canada had withdrawn its chief negotiator from 1987 trade talks with the United States over the same issue, Freeland said "our government will be equally resolute." She did not elaborate.

Freeland also said Canada wanted stronger labor and environmental provisions in the new NAFTA, adding that movement of professionals should be made easier.

(Reporting by Andrea Hopkins and David Ljunggren; Editing by Jim Finkle)

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