NAFTA Negotiation Updates

Posted on Posted in Industry News

Summary of Objectives for the NAFTA Renegotiation

The fifth round of talks took place in Mexico City in Mid-November with what the media is calling “no substantial breakthrough.”  The three countries have agreed to extend deadline for talks to March 2018, which may be tough during Mexico elections and U.S. midterms.

Potential Disagreement on the following topics:
  • Reduce deficit, Strengthen rules of orign (U.S. content)
  • Eliminate Chapter 19 NAFTA safeguard exclusion
  • The Sunset Clause
  • Review Dispute Settlements
  • Expand NAFTA visa categories

The U.S. hasn’t backed down on key demands, but Mexico and Canada have high hopes it will.  In fact, Canada continues to warn there won’t be a deal unless the U.S. can let up a bit on its demands.  It’s interesting to also point out that the U.S. trade deficit has gone up with Mexico and down with Canada.  An ambassador from Mexico states that it is important to note that the U.S. can rely heavily on Mexico and Canada for its exports, but shouldn’t just focus on products and goods.  The U.S. is strong in services, so why not increase its export services?

According to Bloomberg Politics,

“The U.S. is frustrated with what it perceives to be the reluctance of Canada and Mexico to present counter-proposals to U.S. positions on key issues such as regional content requirements and dispute settlement, said a person close to the negotiations. American officials are especially discouraged by Canada for publicly stating that the U.S. proposals are unacceptable, without presenting alternatives at the negotiating table, said the person, who spoke on condition of anonymity.”
Some of the U.S. key demands or proposal include the following topics:
  • Rules of Origin (U.S. Content)
  • Dairy
  • Automotive
  • Dispute Panels
  • Government Procurement
  • Sunset Clause
Not all topics are disagreed upon.  The three countries have similar objectives on the following topics:
  • Modernize agreement
  • Customs & Trade facilitation
  • Labor and environment chapters
  • Increase SME trade
  • Anticorruption
  • Telecommunications and financial services
  • Facilitate cross border trade (improve border infrastructure)
  • Strengthen labor environment
Topics Still on the Table:
  • Expand market access
  • Keep sub-national ‘Buy American’
  • Currency manipulation chapter
  • Preserve and strengthen energy
  • State owned enterprises
  • Strengthen competitiveness
  • Include gender provisions
  • Workforce development

 

The USTR has updated their list of objectives.

VIEW NOW

 

 

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