US lawmakers have registered their opposition to several of President Donald Trump’s proposals to revamp the North American Free Trade Agreement (NAFTA), criticising the emphasis on using trade agreements to reduce the trade deficit.
As the fifth round of negotiations get underway today (17 November) in Mexico City, three Senators – James Lankford, Mike Enzi, and John Thune – this week issued a letter to US Trade Representative Robert Lighthizer stating that a proposed provision that would automatically terminate NAFTA after five years unless it is specifically renewed is “unnecessary.”
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“Your very engagement in not only reviewing, but renegotiating, the North American Free Trade Agreement (NAFTA) without any current sunset is evidence of every future US administration’s ability to review and renegotiate trade deals,” the letter noted. “As you know, any change in US law needed to conform to any renegotiated deal cannot be implemented unilaterally, but must be approved by Congress.”
Mexican Economy Minister, Ildefonso Guajardo, reportedly said this week that a review every five years would be acceptable but not in association with an automatic termination.
The Senators also criticised the Administration’s emphasis on using trade agreements to reduce the US trade deficit, stating that seeking to create domestic jobs “through enacting additional barriers to trade and taxes on imports should not be the focus of US trade policy”.
“This is especially true since tariffs burden lower-income families disproportionately. Instead, we should begin reducing excessive government red tape, which depresses workers’ wages and constrains small business growth.”
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By GlobalDataThe Senators pointed out that statistics from the last decade show a negative correlation between US jobs and the trade deficit and at times actually indicate an inverse relationship.
“If the desired result of current trade agreement renegotiations is job growth, concern over a negative trade balance should not be part of those discussions,” they state.
Customs and international trade law firm Sandler, Travis & Rosenberg says some of the nearly 30 NAFTA negotiating groups began meeting on 15 November, even though the round didn’t formally begin until today.
It adds: “The Trade Ministers of each country said that following their “substantive discussions” at a recent meeting of the Asia-Pacific Economic Cooperation forum they agreed not to attend the NAFTA talks “so negotiators can continue to make important progress on key chapters advanced in round 4.”
Analysts this week said a withdrawal from NAFTA could lose the US credibility as a global trading partner and undermine the prospects for current and future US apparel manufacturing.
NAFTA talks could undermine apparel manufacturing prospects
