NAFTA negotiations key for life and health insurers’ prosperity, says CLHIA

Representatives of US, Canada and Mexico will deliberate this August on trade deal

NAFTA negotiations key for life and health insurers’ prosperity, says CLHIA
The Office for the US Trade Representative (USTR) concluded its public hearings yesterday ahead of upcoming NAFTA negotiations in August. The USTR gave its required 90-day notification to the United States Congress on May 18 outlining its intent to renegotiate NAFTA, which will have far-reaching implications for trade right across the continent.

A number of sectors have already stated their support for an updated agreement, with the life and health insurance industry the latest to comment on the deal.

As part of a greater alliance of North American insurance carriers, The CLHIA joined The American Council of Life Insurers, American Insurance Association, Insurance Bureau of Canada and the Mexican Association of Insurance Companies to throw their full backing behind the treaty.

For Canadian life and health providers, major firms such as Manulife, Sun Life and Great-West Life have substantial business interests in the US, and clearly have a vested interest in the success of the trade agreement.

Leah Littlepage is director of international affairs at the CLHIA, where she represents the interests of Canadian insurers that have global operations in their discussions with the Canadian government. The relationship with Ottawa and Washington has become strained in recent months after a positive first meeting between Donald Trump and Justin Trudeau in February. With the two countries at loggerheads over lumber tariffs currently, it’s far from a certainty that consensus can be found when representatives of the two countries meet their Mexican counterparts in August.

In her position with the CLHIA, Littlepage has been involved with high-level trade negotiations, including the Trans Pacific Partnership (TPP) and the Comprehensive Economic and Trade Agreement (CETA). The survival of NAFTA is now a pressing issue for the life and health industry, as she explains.

“Looking at the highest level, NATA means increased market access between all three countries,” she says. “It means it is easier to trade. Some of the insurance companies have big clients like the auto sector, so the better they do means there is also more money going into the capital markets.”

Aside from dollars and cents, trade agreements of this kind also mean greater cross-border cooperation on regulation, which in the digital age is vitally important.

“NAFTA has reduced regulatory barriers and improved regulatory cooperation, so much that regulators have open-door communication with each other,” says Littlepage. ”Any changes in policy they will talk to each other about it.”

The agreement, enacted in 1994, has had its naysayers over the years, most notably the current US president who vowed to tear it up early into his administration. Littlepage concedes that the pact has its faults, but the upcoming discussions will likely be more about tweaking rather than completely rebuilding the original agreement.

“I don’t think it is crystalized yet how this will pan out,” she says. “Renegotiation means opening up the agreement completely, which doesn’t seem to be the indication that we are getting at this stage. Our sector has benefitted quite a bit from how NAFTA is today, but we would like to see some small tweaks on labour mobility. That would mean visas for people when companies want to use experts from other countries.”

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