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Trump administration releases outline for NAFTA renegotiations

2017/7/20 15:07

The Trump administration released Monday its goals for renegotiating the North American Free Trade Agreement (NAFTA), outlining a plan to reduce the US trade deficit with Mexico, restrict the amount of imported material in goods that qualify under the agreement, and eliminate a controversial mechanism to review trade remedies. The full outline can be found here.
Over a third of US exports flow to Canada and Mexico, and companies that export products to Canada and Mexico are wary of any negotiations that could limit their future access to those markets. Since the agreement was signed into law in 1994, North American trade has tripled to more than $1.1 trillion in 2016. The US Chamber of Commerce estimates that 14 million American jobs depend on trade with Canada and Mexico.
Meanwhile, companies that have struggled against foreign competition, as well as labor groups opposed to US worker wages being undercut by foreign workers, were reportedly hoping for measures that would level the playing field.
The first provision of the 17-page document called for the US to reduce its trade deficit with Canada and particularly Mexico. While Trump has described trade deficits a sign of a broken trading system, economists say that approach can be misleading. Other provisions are reportedly similar to some that appeared in the now-defunct Trans-Pacific Partnership, including measures to regulate treatment of workers, the environment and state-owned enterprises.
Representatives from Canada and Mexico are also wary of the overall negotiation outline. Canadian Foreign Minister Chrystia Freeland told news media that Canada is America’s top consumer of US-produced goods and services, and NAFTA supports millions of middle class jobs in Canada, the US and Mexico. "When negotiations begin, we will be ready to work with our partners to modernize NAFTA, while defending Canada's national interest and standing up for our values," Freeland said in a statement.

Source: SteelOrbis 
 
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