Nafta's red tape fight hits snag as business group sounds alarm

Ottawa

THE US, Canada and Mexico are at odds over a proposal to beef up Nafta's powers to cut red tape, as one major business group warns efforts to simplify regulations could end up taking a step backward.

Canada wants to roll the existing US-Canada Regulatory Cooperation Council into the North American Free Trade Agreement, a pact President Donald Trump is threatening to quit. Advocates of the Canadian proposal liked the idea of entrenching stronger harmonisation of rules on things like food safety and drones while also adding Mexico into the mix - and doing so would also boost another Trump goal of cutting red tape for businesses.

But the push has hit a wall. The US is signalling a scepticism for a trilateral council and that accepting it may require a power shift - if rolled into Nafta, the council would move under the control of US Trade Representative Robert Lighthizer's office. A Lighthizer spokeswoman declined comment, while a business group that initially backed the idea is now sounding a…