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American Shipper

NAFTA deal in principle by September possible

U.S. Trade Representative Robert Lighthizer says concluding the renegotiation by the end of August would allow NAFTA 2.0 to be in place before Mexico swears in new president.

   The Trump administration is looking to conclude a NAFTA deal in principle by the end of August, which would provide for the agreement to be finalized before Mexican President-elect Andres Manuel Lopez Obrador takes the helm Dec. 1, in accordance with Trade Promotion Authority timeline requirements, U.S. Trade Representative Robert Lighthizer told a Senate subcommittee on Thursday.
   “If you go back 90 days, that takes you to around the end of August,” Lighthizer said during a hearing of the Senate Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies. “My sense is that that’s not an unreasonable time frame if everybody wants to get it done. That’s what our hope is.”
   Lighthizer said he was meeting Thursday afternoon on NAFTA with Mexican officials, including members of the newly elected government.
   He noted Canada’s engagement as a lingering sticking point in negotiations and said he hopes the U.S. and Mexico can conclude a deal on their end “before too long,” setting the stage for Canada to “come in” and start to compromise at the same level as the United States and Mexico.
   “I don’t believe that they’ve compromised in the same way that the United States has or that Mexico has,” Lighthizer said.
   If NAFTA is concluded during the hopeful timeline, the United States still will seek the approval of the Lopez Obrador government, he said.
   Lighthizer said earlier during the hearing that he believes NAFTA parties are “very close” on concluding the renegotiation.
   He said NAFTA “clearly” should have a sunset review mechanism, noting free trade agreements deserve periodic examination because they provide member countries with better advantages than the baseline most-favored nation World Trade Organization standard.
   “The basic idea of a free trade agreement is this: … What we’re saying to a country is, ‘We’ll give you better access than we’re giving the rest of the world, and you give us approximately an equal amount of better access,’” Lighthizer said. “It’s reasonable to say that after a period of time and after economies change and evolve, to say, ‘Did we give them approximately equal to what we got?’ If we didn’t, it wasn’t a good deal, in my judgment. Now, it’ll be good for some people, for sure. … But overall, for the country, because of the nature of an FTA, you should sit down and review whether or not it was the deal you wanted.”
   One of the United States’ more contentious proposals during the NAFTA renegotiation was for countries to be required every five years to take stock of whether the agreement was providing expected benefits and to require countries to affirmatively approve the extension of the deal.
   Sen. Lamar Alexander, R-Tenn., said he is one of a “substantial number” of Republicans who won’t vote for a NAFTA deal that includes a sunset clause because that would weaken the pact, noting that the current renegotiation entails a comprehensive review of NAFTA.
   “I would hope you take that back to the negotiations,” Alexander told Lighthizer during the hearing. “I hope that presents a real obstacle to having a sunset clause in any final NAFTA agreement.”
   A resolution on steel and aluminum tariffs imposed on Canada and Mexico June 1 should be part of any successfully renegotiated NAFTA, Lighthizer said.
   He also noted that substantial improvement of labor standards in the agreement is a “high priority” for the United States.

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