Trade Groups Vouch for NAFTA as Renegotiations Resume

Trade Groups Vouch for NAFTA as Renegotiations ResumeNorth American trade officials will convene in Mexico City on Friday to continue NAFTA renegotiation discussions.

Private sector concern over a possible U.S. withdrawal from the North American Free Trade Agreement hangs over Friday’s gathering in Mexico City of American, Canadian and Mexican trade representatives to discuss possible paths forward in retooling the decades-old arrangement.

But some of the loudest criticism of a potential withdrawal has come from within America’s own borders, as Mexico and Canada prepare for the possibility of life without U.S. participation in NAFTA.

“The president ran on trade policies that were deeply concerning to the business community. Since then, his administration has been working through how to manifest those views into actual policy. And so far, they’ve been fairly benign things we can work with,” J.D. Foster, chief economist and a senior vice president at the U.S. Chamber of Commerce, said during a press briefing Thursday.

But Foster, who was speaking for a pro-business lobbying group that historically has backed GOP plans for reforms such as lower taxes and reduced regulation, said a withdrawal from NAFTA would be “of a completely different character and would suggest that the direction of trade policy is exactly the wrong way to go for the American economy.”

“The impacts would clearly be harmful,” he said. “If you withdraw from NAFTA either quickly or slowly over time … you’re moving in the wrong direction.”

Scores of trade groups in recent months have delivered similar assessments. Major oil and gas groups from the U.S., Mexico and Canada earlier this month issued a joint statement in which they warned “any changes that disrupt energy trade across our North American borders, reduce investment protection or revert to high tariffs and trade barriers that preceded NAFTA could put at risk the tens of millions of jobs that depend on North American trade and interdependent energy markets.”

Those in the agriculture industry likewise have expressed concern about the possible dissolution of the agreement between three countries that collectively conduct more than $1 trillion in cross-border trade each year. More than two dozen agriculture groups on Wednesday sent a letter to U.S. Trade Representative Robert Lighthizer, Agriculture Secretary Sonny Perdue, Commerce Secretary Wilbur Ross and National Economic Council Director Gary Cohn arguing against a fresh-produce proposal they fear would spark backlash and harm U.S. agriculture trade, according to Reuters.

“At a time of low commodity prices in much of the United States, U.S. agriculture can hardly afford to see a primary market disrupted,” the letter said.

Retailers and auto manufacturers are among others in industry to have spoken out in favor of maintaining certain aspects of NAFTA, despite the fact that the president and Lighthizer have broadly labeled the agreement a failure in its current form.

Lighthizer struck a stern tone in a statement he delivered as the first round of NAFTA renegotiation meetings began last month, saying the deal had “fundamentally failed many, many Americans and needs major improvements.”

And though members of his administration have at times hinted that President Donald Trump would seek only modest adjustments and was committed to remaining engaged as a NAFTA partner, rhetoric out of the White House has been noticeably sterner since renegotiation discussions began in Washington.

Trump tweeted last weekend that NAFTA was the “worst trade deal ever made” and that both Mexico and Canada were being “very difficult” in renegotiations. And during a rally last week in Arizona, the president accused the other two countries of taking advantage of the U.S.

“I don’t think we can make a deal because we have been so badly taken advantage of,” the president said. “They have made such great deals – both of the countries but in particular Mexico – that I don’t think we can make a deal. So I think we’ll end up probably terminating NAFTA at some point.”

The White House said Thursday that Trump had spoken with Canadian Prime Minister Justin Trudeau about Hurricane Harvey aid and that, during the course of that conversation, the world leaders “stressed their hope to reach an agreement [on NAFTA] by the end of this year.”

Meeting that goal demands an aggressive schedule out of Lighthizer and his counterparts. In a statement released following the first series of NAFTA discussions, negotiators laid out plans for Friday’s meeting in Mexico and another meeting in Canada in “late September,” before returning to the U.S. for yet another round of talks in October.

Meanwhile, whether Trump’s threats of a NAFTA withdrawal are a tough negotiating tactic or portend a real possibility, trade officials south of the U.S. border appear to be girding for a potential future without American involvement in the agreement.

Mexican Economy Secretary Ildefonso Guajardo was quoted Thursday by Reuters as saying NAFTA will “continue to regulate the relationship between Mexico and Canada” regardless of what the U.S. decides to do.

His country also has planned trade discussions with Brazil and Australia, among other countries, to potentially offset trade barriers the U.S. could erect if it pulls out of the agreement.

“Neither Canada nor Mexico will announce their departure [from NAFTA] because we want to keep being regulated by NAFTA,” Guajardo said.


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