Commentary: Trump administration starts NAFTA renegotiation process

by Jay Sjerven
Share This:
Search for similar articles by keyword: [Trade], [United States]
Jay Sjerven Sosland reporter

U.S. Trade Representative (USTR) Robert Lighthizer in a letter dated May 18 notified the congressional leadership that President Donald Trump intends to renegotiate the North American Free Trade Agreement (NAFTA). By law, the administration was required to advise U.S. Congress of its intent to engage in negotiations for a new or modified trade agreement 90 days before such negotiations may commence. Negotiations will begin no earlier than Aug. 16.

“Today, President Trump fulfilled one of his key promises to the American people,” Lighthizer said. “For years, politicians have called for the renegotiation of this agreement, but President Trump is the first to follow through on that promise. USTR will now continue consultations with Congress and American stakeholders to create an agreement that advances the interests of America’s workers, farmers, ranchers and businesses.”

Canadian Minister of Foreign Affairs Chrystia Freeland said in response to the administration’s notification to Congress, “NAFTA’s track record is one of economic growth and middle-class job creation, both here in Canada and throughout North America. Nine million American jobs depend on trade and investment with Canada. Our integrated economies and supply chains support millions of jobs across the continent.”

“We are at an important juncture that offers us an opportunity to determine how we can best align NAFTA to new realities and integrate progressive, free and fair approaches to trade and investment,” Freeland said. “We are steadfastly committed to free trade in the North American region and to ensuring that the benefits of trade are enjoyed by all Canadians.”

NAFTA
NAFTA is a multi-layer free trade agreement between the United States, Canada and Mexico.
 
Mexican Foreign Minister Luis Videgaray, who was in Washington D.C. for unrelated talks at the State Department at the time of the announcement, said, “The government of Mexico welcomes this development. We are prepared. We are ready to work together with both the governments of the United States and Canada to make our trade agreement better.”

In response to a question posed by a reporter, Videgaray said Mexico wanted to maintain NAFTA as a trilateral treaty.

“We have to acknowledge that even in the present treaty, there are certain aspects that apply only bilaterally,” he said. “Each of the countries excluded certain sectors from the agreement at the time, more than 20 years ago. Some sectors in Mexico have special treatment under the agreement. Within the framework of the agreement, there are certain issues that are bilateral in nature between Mexico and the United States, or Mexico and Canada, or Canada and the United States. But our preference is clear. We believe that the framework of a trilateral agreement is in the best interest of the three economies and the peoples of Canada, the United States and Mexico.”

Two-way trade in goods and services between the United States and Canada has nearly tripled since NAFTA took effect in January 1994, and U.S. trade with Mexico has expanded more than six-fold. Last year, the United States had a $55.6-billion goods and services trade deficit with Mexico but a $12.5-billion surplus with Canada, according to the Office of the USTR.

U.S. Secretary of Agriculture George E. (Sonny) Perdue said, “While NAFTA has been an overall positive for American agriculture, any trade deal can always be improved. As President Trump moves forward with renegotiating with Canada and Mexico, I am confident this will result in a better deal for our farmers, ranchers, foresters and producers.”

The food and agriculture community under the umbrella of the Food and Agriculture Dialogue for Trade (Dialogue) voiced support for a negotiated “modernization” of NAFTA.

“Our North American trading partners represent U.S. food and agriculture’s largest export market, with total U.S. agricultural exports to Canada and Mexico more than quadrupling since NAFTA came into effect,” said Dialogue implementing team co-chairs Gary Martin, president and chief executive officer of the North American Export Grain Association, and William Westman, senior vice-president for international affairs with the North American Meat Institute.

“As modernization of NAFTA is negotiated, it is critical to preserve the considerable gains that have been achieved for U.S. food and agriculture,” Martin and Westman said. “We look forward to consulting with the administration, and interacting with Congress and other entities to incorporate the views of the U.S. Food and Agriculture Dialogue for Trade as the U.S. negotiating position is developed.”

Partners