Economics
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
Ottawa's Strategy for Looming Nafta Talks
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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.