United States issues veiled threat to pull investment as NAFTA spat escalates

Cheryl Sanders
October 18, 2017

After four rounds of talks squeezed into a two-month period, negotiators will now allow a month-long cooling-off period before returning to the bargaining table in Mexico on November 17.

It suggests using NAFTA to strengthen the Mexican economy to boost imports from the U.S. Trade balances, it notes, are "incomplete measures" of a trading relationship. Canada's government dismissed the US dairy proposal, while the Dairy Farmers of Canada called it "outrageous". "New proposals have created challenges and ministers discussed the significant conceptual gaps among the parties", U.S. Trade Representative Robert Lighthizer said Tuesday at a press conference.

"We must understand that we all have limits despite over current differences".


Lighthizer described being "surprised and disappointed by the resistance to change on the part of our negotiating partners", and urged all sides to consider being more flexible before the talks resume again in Mexico next month.

"Countries are reluctant to give up unfair advantage", said Lighthizer. Although Mexico, as well as Canada, plan to hold their ground during the NAFTA renegotiation rounds, Mexican Secretary of Economy Ildefonso Guajardo Villarreal said his country remains committed to the agreement and warned that walking away from it would harm the national economies of the three countries.

"NAFTA has resulted in a huge trade deficit for the United States and has cost us tens of thousands of manufacturing jobs". "It is important also to remember that to some extent, NAFTA is an investment agreement, and it is unreasonable to expect that the United States will continue to encourage and guarantee US companies to invest in Mexico and Canada primarily for export to the United States", he said.


Yet at a separate news conference on Tuesday, she said the United States had proposed limiting its NAFTA partners' access to US government procurement contracts. It has touted the tightly intertwined supply chains across the US auto sector. Given that Mexico may be the largest source country for sex trafficking victims in the United States, and that Mexico is ranked as a Tier 2 country on the U.S. State Department's Trafficking in Persons report, we urge you to ensure that any digital trade language in NAFTA does not immunize any company profiting from the commercialization of sex trafficking, at home or overseas.

Scott Miller, a trade expert at the Center for Strategic and International Studies and a member of an advisory committee for the State Department, told AFP the talks appeared headed for collapse because certain US proposals were non-starters for USA industry and for lawmakers. "And we intend to reduce them".


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