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American Shipper

USTR details Trump administration goals for NAFTA renegotiation

The Office of the United States Trade Representative has released specific negotiating objectives for the planned renegotiation of the North American Free Trade Agreement.

   United States Trade Representative Robert Lighthizer released a summary on Monday of the negotiating objectives for the renegotiation of the North American Free Trade Agreement (NAFTA), a three-member deal with Canada and Mexico.
   The Trump Administration is seeking a renegotiated agreement that will reduce the U.S. trade deficit, along with boosting market access in Canada and Mexico for U.S. manufacturing, agriculture and services, the USTR explained.
   “The negotiating objectives also include adding a digital economy chapter and incorporating and strengthening labor and environment obligations that are currently in NAFTA side agreements,” the USTR said. “Additionally, among other objectives, the Administration will work to eliminate unfair subsidies, market-distorting practices by state owned enterprises, and burdensome restrictions on intellectual property.
   “Since NAFTA was implemented in 1994, the U.S. bilateral goods trade balance with Mexico has gone from a $1.3 billion surplus to a $64 billion deficit in 2016,” the USTR added. “Market access issues have arisen in Canada with respect to dairy, wine, grain and other products – barriers that the current agreement is unequipped to address.”
   The U.S. trade deficit with Mexico stood at $6.8 billion in May, the latest month for which data is available from the U.S. Commerce Department, while the deficit with Canada totaled $2.2 billion for the month. The nation’s overall trade deficit for the first five months of 2017 totaled $233.07 billion, up 13.1 percent from the corresponding 2016 period.
   The Trump administration had sent a letter to Congress on May 18, signaling its intent to renegotiate NAFTA. The U.S. can begin negotiating 90 days from the notification, which would be Aug. 16.
   In response to the negotiating objectives, Mexico’s Economy Minister Ildefonso Guajardo on Tuesday expressed concern that the U.S. was insisting on reducing trade deficits and raised questions about U.S. hopes to scrap the Chapter 19 dispute settlement mechanism that hinders the U.S. in pursuing anti-dumping and anti-subsidy cases against Mexico and Canada, according to a report from Reuters.
   Guajardo also expressed his doubts about the U.S.’ intention to get rid of NAFTA’s so-called “global safeguard exclusion.”
   “This will all have to be subject to the three sides being in agreement in the process,” he said.
   However, Guajardo welcomed parts of the document, including plans to enshrine anti-corruption provisions in NAFTA. “What is positive is that (the United States) themselves paraphrased that they won’t reintroduce quotas or tariffs during this process (of renegotiation),” he said.

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