The long-awaited U.S. outline for the goals of a renegotiation of NAFTA has been unveiled, and there are few surprises in the 17-page document. Basically, the document outlines the U.S. top priority of shrinking trade deficits with Canada and Mexico. U.S. Trade Representative Robert Lighthizer said the goal would be to improve access to U.S. goods.
Talks are expected to be begin in August.
The document does not call for punitive tariffs, which is notable as the U.S. and Canada are currently fighting over the export of Canadian softwood.
Several experts, though, believe the focus on bilateral trade deficits does not take into consideration the global economy.
“The first bullet point shows their preoccupation with bilateral trade deficits and that’s unfortunate,” Chad Bown, a senior fellow and trade expert at the Peterson Institute for International Economics, told Reuters. “There’s not much that trade policy and trade agreements can do to change those. That’s more of a macroeconomic issue.”
Lighthizer also called for the elimination of a trade dispute mechanism that he said prohibits the U.S. from seeking anti-dumping and anti-subsidy cases against Canadian and Mexican companies. It also seeks to strengthen “rules of origin” to incentivize the sourcing of U.S. goods.
Did you know?
The U.S. trade deficit with Canada in 2016 was $11 billion and with Mexico it was $63 billion. The largest trade deficit is with China, $347 billion.
“We will do everything we can to make this a good agreement and to hold the president at his word and make sure we get a renegotiation.”
– Richard Trumka, AFL-CIO president, on NAFTA talks
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The 17-page document outlining the U.S. priorities in the upcoming NAFTA negotiations lays the groundwork for what the administration will be looking for. As with any negotiations, though, the final product will likely be far from the original document, so U.S. companies at this point should take any talk with a grain of salt.
Hammer down everyone!