CBA Record July-August 2018

FUTURE OF NAFTA DISCUSSED AT JOINT CBA/MONTREAL BAR SYMPOSIUM Bar Leaders Talk Trade

By Lawrence Friedman A meeting between CBA President Judge Thomas R. Mulroy and Michael Synnott, President of the Bar of Montreal, at the 2017 World Conference of Bar Leaders resulted in the recent joint symposium on U.S.-Canada trade relations, the future of NAFTA, and how to address the current friction in our bilateral relationship. The program, called “Comprehensive Trade Agreements and the Modernized NAFTA,” was held at the CBA June 14 and 15, 2018. The presenta- tions were recorded and are available to be viewed at www.chicagobar.org/cle. The 1994 North American Free Trade Agreement was America’s first modern effort to liberalize trade outside of the mul- tilateral General Agreement on Tariffs and Trade (now theWTO). Once implemented by the U.S., Canada, and Mexico, NAFTA covers traditional trade topics such as tariff reductions, rules of origin, and customs formalities. It also covers international aspects of intellectual property law, govern- ment procurement, professional immigra- tion, and foreign investment protections. In addition, it includes two side agreements covering labor and the environment. NAFTA, which now covers approxi- mately $1 trillion in annual trade, has been in the news much of late. During the last presidential campaign, now-President Trump suggested that he may withdraw the United States from the Agreement. So far, that has not happened but the three coun- tries have not yet negotiated an updated agreement. Complicating matters, that negotiation is being done in an unusually volatile environment. Since his election, President Trump has used the formerly obscure Section 232 of the Trade Expansion Act of 1962 to impose 25% tariffs on steel and 10% tariffs on aluminum entering the United States. These tariffs apply globally, though

overview of public opinion of international trade presented by Dina Smeltz, Senior Fellow at the Chicago Council on Global Affairs. That was followed by a discussion of immigration, labor, and environmental aspects of the NAFTA. CBA Secretary Lynn Grayson discussed how the NAFTA side agreement, formally entitled the North American Agreement on Environmental Cooperation, has proved to have little envi- ronmental utility while the NAFTA rules protecting foreign investment have become powerful tools for industry to challenge unfair governmental measures directed at protecting the environment. The second panel asked the general question of how NAFTA should change to reflect the modern environment. When NAFTA was implemented, there was essentially no e-commerce and no digital trade. This session focused on, among other topics, challenges facing the pharmaceuti- cal industry’s efforts to harmonize patent durations and concerns about data localiza- tion requirements. The next group of speakers addressed the controversial NAFTA Chapter 11 pro- visions covering the settlement of disputes

various temporary exceptions were granted. Statutorily, these tariffs are directed at pre- serving U.S. national security. The fact that they are being applied to Canada, Mexico and other allies has, therefore, caused some controversy. Canada and Mexico have announced their intentions to impose retaliatory duties on American exports. The president has also announced his intention to impose 25% duties on a broad range of products from China under Sec- tion 301 of the Trade Act of 1974. These duties are intended to punish China for unfair practices relating to U.S. intellectual property rights including lax enforcement and forced technology transfers. China has promised to retaliate. Add to that a contentious G7 meeting in which the president erroneously accused Canada of burning down theWhite House during the War of 1812. Program Details This was, therefore, a perfect time for the Bars of both Chicago and Montreal to come together for two days to discuss the legal aspects of our trading relationship. The program started with a data-driven

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