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This Obscure Nafta Chapter Could Be Canada’s Deal-Breaker Again

  • Dispute-settlement mechanism avoids U.S. court entanglements
  • Mulroney fought to include it; Trump wants to eliminate it
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Ottawa's Strategy for Looming Nafta Talks

On Oct. 1, 1987, days before the U.S. and Canada signed their biggest-ever trade deal, then-Prime Minister Brian Mulroney shocked the Americans by walking away from the negotiating table.

It was a high-stakes gamble designed to ensure the Free Trade Agreement contained a dispute-settlement mechanism -- what Mulroney called his essential condition -- that would give Canada a way to resolve trade conflicts outside U.S. courts. The David-and-Goliath move worked, and two days later the countries reached an agreement.