Lexpert US Guides

20 | LEXPERT • June 2017 | www.lexpert.ca/usguide-corporate/ ordination; tweaks to NAFTA's state-to-state dispute settlement process; and a new investor-state dispute scheme. Canada will also likely seek more liberal rules on worker mo- bility, particularly for digital economy professions. Despite the new administration's focus on security and immigration, Adkins believes Canada has demonstrated how seriously the federal gov- ernment takes border security. "We just have to keep getting that message across to obviate concerns that Canada is a back door to the US," he says. "The focus, I think, will remain on Mexico, because that's what the President's constituents care about." But uncertainty lingers: "Will the end of NAFTA mean that all Ca- nadians working in the US under NAFTA visas will have to go home?" asks Roy Berg of Moodys Gartner LLP in Calgary. For its part, the US will hone in on supply management in agriculture; changes to country-of-origin labeling requirements; more scope for foreign investment in telecommunications; re- straints on softwood lumber exports; modifications to Canada's intellectual property rights laws to bring them closer to the US system; and transferring anti-dumping and anti-subsidy jurisdic- tion to US courts from the current system that engages a bina- tional dispute-settlement mechanism. Confidential briefing notes from the US Trade Representa- tive's Office — prepared in December 2016 and meant for the Trump transition team but obtained by CBC News — shed further light on American priorities in trade negotiations with Canada. Most interesting, perhaps, is that USTR officials have not flagged NAFTA on their list of trade issues. Among the is- sues listed, the softwood lumber dispute is highlighted, with the authors of the briefing notes stating that Canada has "un- fairly subsidized or dumped" softwood lumber and that resolution of the issue ap- pears remote. Millar shares that view. "A negotiated set- tlement based on the current rules isn't going to happen," he says. The notes also express concern about dairy supply manage- ment, noting that CETA could undermine US exports to Can- ada by some $200 million. The notes say nothing, however, on other supply-managed products like poultry or eggs. As well, while Congress amended US law to eliminate man- datory labeling requirements on beef and pork after the World Trade Organization ruled against its country-of-origin labeling (COOL) measures, the USTR notes indicate that the dispute has not been "formally terminated." Indeed, Millar believes that COOL is where President Trump will be focusing. "Enforce- ment issues at the border have traditionally centered around value and tariff classification, with rules of origin being the laggard," he says. "I believe that's going to flip and that enforcement will focus on these rules going forward." Millar also expects an upswing in non-tariff barriers related to safety standards and other types of labeling. "I think that the drive to harmonize standards that we've been experiencing will abate," he says. He also expects an uptick in US anti-dumping en- forcement — "it's been very quiet in recent years" — whether or not the jurisdiction remains with the binational process or moves to the US courts. Peter Kirby of Fasken Martineau DuMoulin LLP in Montréal believes that the brunt of the impact will come at the adminis- trative level. "The Department of Commerce has been told to be more creative in the sense of being unshackled and doing what- ever they can do to enhance President Trump's trade policy by deciding any close calls on imports in favor of the US," he says. "Freight forwarders may find that the border keeps getting sticki- er, but the people making the decisions on the ground for the US have received assurances that no one will lose their job because of the position they take on imports." According to Kirby, that may not be as drastic a change as it first seems: the Obama administration, he points out, had al- ready instructed border services personnel to get a lot more ag- gressive with anti-dumping. "For a while now, the tone has been to slow down imports, and that's a tone that can be implemented in myriad ways," he says. While the US, as a global powerhouse, may hold the stronger cards in the negotiating deck, what Canada does have going for it is an emerging trend to unified political action and lobbying by businesses on both sides of the border. Eschewing their patch- work approach of the past, leading cross-border trade organiza- tions in the US and Canada have organized a united front in their efforts to reach the hearts and minds of governments and legisla- tors in support of cross-border trade. The inaugural 2016 US–Canada SAGE Summit, which took place at Ohio State University's Columbus campus in late June, featured delegates representing 60 leading cross-border business organizations as well as policy and political leaders from both countries. SAGE is an acronym for "Strategies. Advocacy. Gate- ways. Engagement," which are the organization's action pillars. "This summit marked the first time that these organizations came together under one roof to chart a course for the future of the Canada-US relationship," says Columbus-based Daniel Ujczo, a Summit co-founder and an international trade lawyer at Dickinson Wright PLLC, a firm with offices in Canada and the US, whose practice includes a significant focus on cross-border law and trade. "With a new government in power in Canada and American elections on the horizon, we needed to come up with a new way to manage this relationship going forward." The timing, it appears, is perfect. "We just have to keep getting that message across to obviate concerns that Canada is a back door to the US. The focus, I think, will remain on Mexico, because that's what the President's constituents care about." Mark Adkins Blake, Cassels & Graydon LLP POLITICAL DIVIDE

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