NAFTA Renegotiation: Round One Complete, President Trump Reiterates Threat to Pull Out of the Agreement

Background

Sara Schaefer-Munoz and Bob Davis reported in Monday’s Wall Street Journal that, “[In the opening-round of talks to remake the North American Free Trade Agreement] which concluded Sunday, the [U.S., Mexico, and Canada] said in a trilateral statement they had made ‘detailed conceptual presentations‘ of their positions and were working toward ‘an ambitious outcome’ through a fast-paced schedule of negotiations.

“Early tensions over areas such as the so-called rules of origin—a major issue for the automotive industry—signaled the tough bargaining that lies ahead as the three nations try to wrap up a deal by early next year.”

The Journal writers noted that, “At this early stage of the talks, it is difficult to measure the depth of the disagreement. Opening rounds generally set the tone and schedule for negotiations. The U.S. has yet to release specifics on some of its most controversial positions, including measures to reduce the U.S. trade deficit, prevent currency manipulation, favor U.S. companies in government contracts, known colloquially as Buy America, and rework rules governing arbitration panels.”

Munoz and Davis also explained that:

The U.S. feels that its most significant leverage in the talks is Mr. Trump’s threat to withdraw from Nafta if the U.S. doesn’t get the changes it wants. North American trade is far more significant to the Canadian and Mexican economies than it is for the U.S.

Mexican negotiators say they are prepared to scrap Nafta rather than accede to demands they consider harmful to their economy.”

 

U.S. Trade Representative Robert Lighthizer makes opening remarks last week to launch renegotiations of NAFTA (PHOTO: Jacquelyn Martin / Associated Press (Los Angeles Times)).

Don Lee reported this week at the Los Angeles Times Online that, “After the opening round of talks to revamp the North American Free Trade Agreement, at least this much is known: The U.S. is pushing for comprehensive changes and racing to meet a tight political calendar.

“In a joint statement issued Sunday upon conclusion of the first session, trade officials from the U.S., Canada and Mexico outlined an aggressive schedule for future meetings. They will reconvene Sept. 1-5 in Mexico and then later that month in Canada, to be followed by another round in Washington in October.”

Mr. Lee indicated that, “But it is far from clear how realistic that timetable is, given the ambitious plans outlined by the Trump administration to rewrite major sections of the 23-year-old pact, including the United States’ much-opposed focus on reducing the country’s trade deficit and strengthening its hand in enforcement.

“‘They’re the ones who said they want more than just tweaking [of NAFTA] — and they want it very fast,’ said John Masswohl, director of government and international relations for the Canadian Cattlemen’s Assn., who, along with other business groups from all three countries, was at hand monitoring the talks. ‘You can have it quick or have it meaningful. You can’t have both.'”

The L.A. Times article added that, “The [join-trilateral] statement did not characterize the tenor of the talks, nor did it address any specific subject of negotiations. There was no news conference afterward, and trade negotiators left quietly or declined to comment. Representatives of [U.S. Trade Representative Robert Lighthizer’s] office did not return messages.”

And Reuters writers David Lawder and Anthony Esposito reported earlier this week that, “One person directly involved in the talks described the schedule as exceedingly fast, given that past trade deals took years to negotiate.”

Keith Good

Keith Good is the social media manager for the farmdoc project at the University of Illinois. He is well known in agricultural circles for the daily FarmPolicy.com News Summary.