Wednesday, August 16, 2017 STR Trade Report
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U.S. Trade Representative Robert Lighthizer said at the launch of negotiations to revamp NAFTA Aug. 16 that President Trump “is not interested in a mere tweaking of a few provisions and a couple of updated chapters” but instead will seek “major improvements.” Lighthizer said this task will be “very difficult” but expressed hope that the end result will be “freer markets, fairer and balanced trade, and stronger ties between our three countries.”
Lighthizer indicated that the negotiations will pursue two objectives. The first is to modernize or create provisions that protect e-commerce, update customs procedures, protect intellectual property, improve energy provisions, enhance transparency rules, and promote science-based agricultural trade. In each of these areas, he said, the U.S. hopes to develop “model provisions that can be used for years ahead and that have the flexibility to adapt to future innovations that we can’t even imagine at this point.”
Second will be “the tough work” of balancing “the legitimate interests of literally millions of people in our countries,” including farmers, businesses, workers, and families. Lighthizer acknowledged that “many Americans have benefited from NAFTA,” including farmers and ranchers for whom Canada and Mexico are their largest export markets, but asserted that “for countless Americans, this agreement has failed.” He specifically cited “huge trade deficits,” including $68 billion in auto trade with Mexico alone in 2016 and more than $365 billion with Canada over the last decade; at least 700,000 U.S. jobs lost to “changing trade flows resulting from NAFTA,” a figure he said many believe is “much, much bigger;” and businesses that have closed or moved because of intended or unintended incentives in the current agreement.
As a result, Lighthizer said, key U.S. priorities will include the following.
- prevent the continuation of large trade deficits and assure balance and reciprocity
- add higher NAFTA content and substantial U.S. content in the rules of origin, particularly for autos and auto parts
- verified (not deemed) country of origin
- include labor provisions in the agreement that are as strong as possible
- ensure that dispute settlement provisions respect national sovereignty and democratic processes
- include provisions to guard against the market-distorting practices of other countries, including third-party dumping and state-owned enterprises
- assure equal access and reciprocity in government procurement and agriculture