Canadian Diplomat Says Democrats Evasive on What They Want Changed in New NAFTA
Joe Comartin, Canada's top diplomat in Detroit, visited Capitol Hill to take the temperature of the chances of passage for the new NAFTA this year. He came away without much clarity.
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Comartin, who met with Democrat and Republican House members from the four-state region the Consulate covers -- Michigan, Ohio, Kentucky and Indiana -- said none of the Democrats told him directly they will vote no. He said all the Republicans he talked to are interested in getting the deal ratified this year, as long as the tariffs and countermeasures are lifted first. "Clearly what the Democrats are looking for ... is some kind of additional [enforcement] structure" beyond the state-to-state dispute mechanisms in the agreement, Comartin said. But when he asks what exactly they need to support ratification, he said, he doesn't get specifics. He said the U.S. labor movement is offering specific ideas, such as labor-initiated cases or a labor secretariat, but that Congress members don't seem to have a plan.
"The frustration for Canada's part is ... if there are specific concerns the Democrats have, we would like to hear them, we could respond." He said even if the text was reopened -- which Canada has said repeatedly it opposes -- it would still take years to see if the additional enforcement structure was making a difference in Mexico's labor environment. So, Comartin argues, pass the new NAFTA, and at the six-year mark, "we will have a clear picture" on whether independent unions are thriving in Mexico. If the labor changes still aren't considered good enough by that time, then labor unions in all three countries may have some solutions.
The extension of the exclusivity period for biologics to 10 years is a concern for a wide spectrum of Democrats, Comartin said, even those he characterized as in the middle, neither strongly free-trade-oriented nor traditional foes of trade agreements. He had not known that the U.S. monopoly period is already longer than that. Canada will have to change its law, which is currently eight years, and that will drive up costs for Canadians who use these drugs, which are often far more expensive than small-molecule drugs. "These Democrats are the ones who led the charge on trying to improve health care in this country, generally," he said, and they tell him they're concerned about driving up pharma costs.
Canada is the second-most expensive country in the world for pharma costs, Comartin said, and there is pressure for the federal government to directly subsidize prescription drugs. Currently, each province provides health care in its own way, and only some populations have a drug benefit in their government-provided insurance.
Even though Canada's not happy about extending the exclusivity period, because it will clearly increase costs, "We did agree to it, so we're stuck," Comartin said. Even so, he said they don't want to reopen the agreement to change it. Mexican diplomats have also said they don't like the requirement, but that opening the agreement again would be a Pandora's box (see 1902210031).