USTR Sets NAFTA Renegotiation Process in Motion With Formal Notice to Congress
U.S. Trade Representative Robert Lighthizer formally notified Congress on May 18 that the Trump administration intends to start renegotiating NAFTA as early as Aug. 16. In letters (here) to congressional leaders, Lighthizer said the renegotiation will aim to modernize NAFTA provisions on customs procedures, intellectual property rights and other issues. The letters state that “aggressive enforcement” is “vital” to the U.S.’s ability to hold Canada and Mexico accountable for their commitments under the deal, and that the U.S. will work to improve NAFTA enforcement provisions. Lighthizer wrote that the administration intends to conclude negotiations in a “timely and substantive” manner “consistent with U.S. priorities and the negotiating objectives established by the Congress in statute.”
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The notice was required by statute ahead of NAFTA negotiations. “We intend to initiate negotiations with Canada and Mexico as soon as practicable, but no earlier than 90 days from the date of this notice,” Lighthizer said in the letter. The administration will work closely with Congress to continue to review elements of NAFTA and update U.S. approaches to address challenges faced by U.S. consumers, businesses, farmers, ranchers and workers in an increasingly globalized economy, he said. The Office of the U.S. Trade Representative must also post on its website specific negotiation objectives at least 30 days before starting talks. “In particular, we note that NAFTA was negotiated 25 years ago, and while our economy and businesses have changed considerably over that period, NAFTA has not,” Lighthizer said. “Many chapters are outdated and do not reflect modern standards. For example, digital trade was in its infancy when NAFTA was enacted.”
Responding to Lighthizer’s notice, Canadian Minister of Foreign Affairs Chrystia Freeland in a statement (here) said her country remains “steadfastly committed” to North American trade, and that USTR’s notification “has long been anticipated. “We are at an important juncture that offers us an opportunity to determine how we can best align NAFTA to new realities -- and integrate progressive, free and fair approaches to trade and investment,” Freeland said.
Trade-focused congressional Democrats largely criticized Lighthizer’s letter as too vague, with House Ways and Means ranking member Richard Neal, D-Mass., and Ways and Means Trade Subcommittee ranking member Bill Pascrell, D-N.J., even sending a response letter (here) to Lighthizer expressing concern with its lack of specificity. Neal and Pascrell said Congress was expecting more specificity, and claimed that some administration officials are saying that the Trans-Pacific Partnership will serve as the starting point for many proposals to change NAFTA. “The tone and substance of the letter cannot be squared with the statements the President made describing NAFTA as a ‘disaster’ and the ‘single worst trade deal’ the United States ever negotiated,” the ranking members wrote. “The letter, on the other hand, emphasizes that the Administration’s goal is merely to ‘improve’ and ‘modernize’ NAFTA.” They pointed out the difference between the length of Lighthizer’s formal notice and the March eight-page draft sent to Congress (see 1703300056). Neal and Pascrell asked for more clarity on government procurement, currency manipulation, rules of origin, investor-state dispute settlement and labor provisions.
Senate Finance Committee ranking member Ron Wyden, D-Ore., in a statement (here) called the notice “disappointingly vague” and said the administration has “rushed” consultations with Congress. But he said he is “encouraged” that Lighthizer committed to improve upon several areas of TPP and to the elimination of NAFTA’s Chapter 19 covering binational antidumping and countervailing dispute settlement (see 1705160082). Wyden also noted the Trade Promotion Authority (TPA) requirement for the administration to provide Congress with specific negotiation objectives at least 30 days before talks start, and called for Lighthizer to engage with Congress and “a broad range of stakeholders” before submitting those objectives. Ways and Means member Sandy Levin, D-Mich., in a statement (here) blasted the notification letter as “meaningless," and requested hearings ahead of negotiations.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Ways and Means Chairman Kevin Brady, R-Texas, welcomed the notification. Hatch said (here) Congress will work “seamlessly” with Lighthizer to examine how NAFTA can be improved. It's "time to update and improve this 20-year-old agreement to ensure that NAFTA continues to open more markets for American manufactured goods, agricultural products, and services and that it better reflects our needs in the 21st century,” Brady said in a statement (here).
National Foreign Trade Council President Rufus Yerxa in a statement (here) said the renegotiated NAFTA should improve U.S. competitiveness but not impose new barriers. “NFTC and our member companies are prepared to work closely with U.S. negotiators to identify key potential gains for the United States from a modernization of the agreement,” he said. “A stronger NAFTA is vital for the U.S. economy as well as for U.S. workers, service providers, farmers and ranchers, and consumers."