U.S. outlines roadmap for NAFTA overhaul

Andrew Cummings
July 18, 2017

"If we integrate further and make Mexico more competitive versus China ... even if our exports rise, U.S.jobs will rise, because when we export (to the United States), they're exporting too (via USA content)", said Jaime Serra, a former trade minister who led the initial NAFTA negotiations for Mexico.

"Through the renegotiation of NAFTA, the Trump administration will seek a much better agreement that reduces the US trade deficit and is fair for all Americans by improving market access in Canada and Mexico for USA manufacturing, agriculture, and services", said USTR Robert Lighthizer in a statement on Monday.

Among the objectives Lighthizer outlined are reducing the U.S. trade deficit with NAFTA countries, maintaining reciprocal duty-free market access for industrial goods, and ensuring transparency and accountability in the development and implementation of regulations.

"Under President Trump's leadership, USTR will negotiate a fair deal". Lighthizer in May sent a letter to Congress notifying it of the administration's intent to initiate NAFTA renegotiations.

Economists have warned that reaching the goals might be hard.

Mexico and Canada have both said they would push their own agendas at the talks.

He said it could be hard to reduce bilateral trade deficits because negotiators had a limited ability to affect the private buying decisions of companies and consumers.

A former Commerce Department official, Schott co-chairs a U.S. government advisory committee on trade and the environment that presented arguments to the USTR.

The U.S. goods and services trade deficit with Mexico was $55.6 billion in 2016 and $12.5 billion with Canada.

In regard to Canada, the United States has incurred market access issues in dairy, wine, grain and other products, and the current agreement is unequipped to address the barriers to the market, said the statement.

But while the bilateral deficit has increased, trade among the three countries has soared and the deal forms the backbone of cross-border manufacturing arrangements, including for autos.

And Washington will seek to add a chapter on the digital economy and call for the elimination of state enterprises' unfair trade practices, as well as "burdensome" restrictions on intellectual property.

The USTR objectives also call for strengthening labor and environmental commitments that are now only part of NAFTA side agreements.

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